The Ratio Measuring the Number of Dollars of Sales Earned

question 169

Multiple Choice

The ratio measuring the number of dollars of sales earned per dollar of fixed assets is the

• A) fixed asset turnover ratio
• B) days' in assets ratio
• C) current asset turnover ratio
• D) intangible asset ratio

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Definitions:

Return on Assets

A financial ratio indicating how profitable a company is relative to its total assets, measuring how efficiently a company uses its assets to generate earnings.

Inventory Turnover

Inventory turnover is a ratio showing how many times a company's inventory is sold and replaced over a specific period, indicating the efficiency of inventory management.

Acid Test

A rigorous and conclusive test to prove the effectiveness or value of something.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenue.