A Firm with a Total Asset Turnover Lower Than Industry

question 20

Multiple Choice

A firm with a total asset turnover lower than industry standard may have

• A) excessive cost of goods sold.
• B) insufficient fixed assets.
• C) excessive debt.
• D) insufficient sales.

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Definitions:

Receivables

Money owed to a company by its clients or customers for goods or services provided on credit.

Floor Planning

A method used in retail and wholesale to finance inventory, where a loan covers the cost of goods held in stock until they are sold.

High-Priced Inventory

Inventory items that have a significant cost per unit, often requiring specialized handling or more secured storage due to their value.

Small Business Administration

The Small Business Administration is a U.S. government agency established to support the growth and development of small businesses through loans, loan guarantees, counseling, and other assistance programs.