Which of the Following Ratios Measures How Efficiently the Firm

question 72

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:

Average Inventory

The mean value of inventory over a certain period, calculated to help businesses understand inventory levels and cost of goods sold.

Order Cost

The total expenses incurred in placing and receiving an order, including production, shipping, and handling fees.

Variable Cost Per Unit

The cost that varies with each unit of production or service provided.

Net 30 Credit Policy

A payment term indicating that the payment for goods or services is due 30 days after the invoice date, often used in business-to-business transactions.