A Fixed Asset Turnover Ratio of 4

question 205

Multiple Choice

A fixed asset turnover ratio of 4.3 indicates that for every:

• A)$1 in sales revenue,the firm acquired $4.30 of assets.
• B)$1 in fixed assets,the firm earned $4.30 of net income.
• C)$1 in assets,the firm paid $4.30 of expenses.
• D)$1 in fixed assets,the firm generated $4.30 of net sales.

---

Definitions:

Net Productivity

The actual output after subtracting the inputs used in the production process, indicating the efficiency of production.

Capitalization

The total market value of a company's outstanding shares, representing the investment community's perception of its worth.

Recognizing

The act of identifying, acknowledging, or understanding something as being true or valid.

Unearned Surplus

Income received from sources other than direct labor or active business activities, such as dividends or interest from investments.