The Asset Turnover Ratio Is Computed by Dividing

question 17

Multiple Choice

The asset turnover ratio is computed by dividing

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

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Definitions:

Dollar Value

The worth of a good or service expressed in terms of the amount of money that it can be bought or sold for in the market.

Form Utility

The value added by the process of transforming raw materials into a finished product that is more useful and valuable to consumers.

Manufacturing

The process of converting raw materials or components into finished goods through the use of labor, machinery, and equipment.

Assembly Process

A sequence of operations in which components are put together to form a finished product.