The Calculation of Total Asset Turnover Is

question 73

Multiple Choice

The calculation of total asset turnover is:

• A)Gross profit divided by average total assets.
• B)Average total assets divided by gross profit.
• C)Net sales divided by average total assets.
• D)Average total assets multiplied by net sales.
• E)Net assets multiplied by total assets.

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Definitions:

After-Tax Cash Flow

After-tax cash flow is the net cash flow generated from business activities after accounting for taxes, indicating the actual cash a company has on hand after tax obligations.

Capital Asset

A long-term asset that is not purchased or sold in the normal course of business but is used to generate wealth through investment or appreciation.

Tax Rate

The percentage at which an individual or corporation is taxed; the tax liability as a percentage of annual income.

Terminal Value Assumptions

The assumptions made about the value of a business or project beyond the forecast period when estimating its future cash flows for valuation purposes.