Which of the Following Phrases Best Describes the Interpretation of the Fixed

question 170

Multiple Choice

Which of the following phrases best describes the interpretation of the fixed asset turnover ratio?

• A)It measures how efficiently sales are generated with a given amount of fixed assets.
• B)It measures return on total assets.
• C)It measures the speed of cash collected on fixed assets.
• D)It measures how quickly fixed assets are bought and sold.

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Definitions:

Production Efforts

The exertion of labor and use of resources by a company towards the manufacturing of goods.

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization, a measure of a company's operating performance.

Revenue

The total amount of money generated from the sale of goods, services, or any other use of capital or assets, before any expenses are deducted.

Inventory Level

The number of units of products or materials that are kept in stock by a business.