Which of the Following Ratios Measures How Efficiently the Firm

question 34

Multiple Choice

Which of the following ratios measures how efficiently the firm is using its assets to generate sales?

• A) current ratio
• B) total asset turnover ratio
• C) fixed asset turnover
• D) debt ratio

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Definitions:

Long-Term Investments

Assets held by a company for a period exceeding one year, intended to bring a return on the investment over time.

Common Stock

Equity securities that represent ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Accounting Period

A specific time frame in which financial transactions are recorded and financial statements are prepared, commonly a fiscal quarter or year.

Voting Common Stock

Shares that give the shareholder the right to vote on corporate matters, such as electing the board of directors, at shareholder meetings.