If a Company's Fixed Asset Turnover Ratio Decreased from 2010

question 26

Multiple Choice

If a company's fixed asset turnover ratio decreased from 2010 to 2011, which of the following conclusions can be made?

• A) The company was more efficient during 2011 in using its fixed assets to produce profits
• B) The company produced less sales in 2011 for each dollar invested in fixed assets compare to 2010.
• C) The company was less profitable in 2010.
• D) The company over invested in fixed assets in 2010.

Understand the concept of window of opportunity in entrepreneurship.

Grasp the drivers of Earnings Before Interest but After Taxes (EBIAT).

Distinguish between the functions performed by different hemispheres of the brain.

Understand the importance of market share and market size in valuing companies.

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Definitions:

Profit Statements

Financial statements that summarize the revenues, costs, and expenses incurred during a specific period of time, showing the company's net earnings or losses.

Executor

An individual or institution appointed by a will to administer the estate of the deceased.

Right of Survivorship

A legal principle that allows ownership of property to automatically pass to surviving owners upon the death of another owner, without the need for probate.

Articles of Partnership

A document that outlines the terms and conditions under which a partnership operates, including the rights and responsibilities of each partner.