Which Financial Indicator Measures the Ratio of Sales to Fixed

question 62

Multiple Choice

Which financial indicator measures the ratio of sales to fixed assets?

• A) days of inventory
• B) asset turnover
• C) average collection period
• D) fixed asset turnover
• E) inventory turnover

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Definitions:

Total Cost

The aggregate cost of all inputs used in the production of goods or services, including fixed and variable costs.

Purely Competitive Seller

A seller in a market where there are many sellers and buyers, the product is standardized, and no single seller can influence the market price.

Shut Down

A temporary closure of a business or operation.

Marginal Cost

The expenditure required to produce one more unit of a product or service.