A Total Asset Turnover Ratio of 3

question 121

Multiple Choice

A total asset turnover ratio of 3.5 indicates that:

• A) For every $1 in sales, the firm acquired $3.50 in assets during the year.
• B) For every $1 in assets, the firm earned gross profit of $3.50 during the year.
• C) For every $1 in assets, the firm produced $3.50 in net sales during the year.
• D) For every $1 in assets, the firm paid $3.50 in dividends per share.
• E) For every $1 in assets, the firm earned $3.50 in earnings per share.

---

Definitions:

Finance Perspective

An approach or viewpoint focusing on the management, creation, and study of money, banking, credit, investments, assets, and liabilities.

Pro Forma Financial Statements

Pro forma financial statements are financial reports that a company prepares based on hypothetical scenarios or assumptions, often used for future planning or investment analysis.

Key Elements

Fundamental or essential components that constitute the basis or core of something.

Sustain Growth

The ability of an organization or economy to increase its output or income over a period while maintaining financial and environmental balance.