Which Ratio Assesses How Efficiently a Firm Uses Its Fixed

question 13

Multiple Choice

Which ratio assesses how efficiently a firm uses its fixed assets?

• A) capital intensity ratio
• B) current ratio
• C) average collection period
• D) fixed asset turnover

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Definitions:

Credit

The provision of resources (such as money, goods, or services) by one party to another, with the expectation that the second party will repay the first party at a later date.

Pledge

A promise or agreement to do something, often backed by an assurance in the form of property or rights as a security for the fulfillment of an obligation.

UCC

The Uniform Commercial Code is a collection of legal guidelines that regulate business dealings across the United States.

Creditor

An individual or entity that is owed money or other forms of assets by a debtor.