The Asset Turnover Ratio

question 244

Multiple Choice

The asset turnover ratio

• A) Is computed by dividing net sales (income statement account) by average total assets (statement of financial position account).
• B) Measures how efficiently a company is using its net sales to purchase and use fixed assets.
• C) Measures how many dollars are invested in fixed assets per dollar of net sales.
• D) All of these answer choices are correct.

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Definitions:

Strategic Business Unit

A semi-autonomous unit within an organization that focuses on a specific market or product line, often with its own strategic direction.

Strategic Alliance

A cooperative agreement between two or more organizations to pursue a set of agreed upon objectives while remaining independent organizations.

Leadership Business Unit

A division or segment within an organization led by a manager with significant autonomy, responsible for strategic decisions and performance of that unit.

Self-Managing Business

A business or organization structure where teams or employees have the autonomy to make decisions and manage their activities without traditional managerial oversight.