The Asset Turnover Ratio Is Computed by Dividing

question 33

Multiple Choice

The asset turnover ratio is computed by dividing

• A) Net sales by average total assets
• B) Net sales by ending total assets
• C) Net income by ending total assets
• D) Net income by average total assets

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Definitions:

Factors of Production

The basic inputs used to produce goods and services, including land, labor, capital, and entrepreneurship.

Complementary Resource

A good or service that is used together with another good or service to provide a benefit or function.

Substitution Effect

The economic understanding that as prices rise or incomes decrease, consumers replace more expensive items with less costly alternatives.

Output Effect

The change in total output resulting from a specific economic policy or condition, such as an increase in demand.