Which of the Following Is a Measure of Operating Efficiency

question 66

Multiple Choice

Which of the following is a measure of operating efficiency?

• A) Debt to assets ratio
• B) Asset turnover ratio
• C) Return on assets
• D) Return on equity

---

Definitions:

Depreciation Expense

Systematically dividing the expense of a tangible asset over the period it remains useful.

Scrap Value

The estimated worth of an asset's materials when the asset is deemed no longer useful and is intended to be disposed of or recycled.

Straight-line Method

A method of calculating depreciation by evenly spreading the cost of an asset over its expected useful life.

Salvage Value

Salvage value refers to the predicted value an asset will have when it is sold after reaching the end of its usability.