Which of the Following Ratios Is the Best Measure for Analyzing

question 211

Multiple Choice

Which of the following ratios is the best measure for analyzing a company's efficiency in using assets to produce sales revenues?

• A)current ratio
• B)return on assets
• C)asset turnover ratio
• D)debt-to-total assets ratio

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Definitions:

Producer Surplus

The difference between the amount that producers are willing and able to sell a good for and the actual amount they receive due to market dynamics.

Equilibrium Price

The price at which the quantity of goods demanded by consumers equals the quantity of goods supplied, resulting in market balance.

Legal Price

A price that is established by law or regulation, rather than determined by the market.

Total Surplus

The sum of consumer surplus and producer surplus, reflecting the total net benefit to society from the production and consumption of goods or services.