Which of the Following Best Expresses Fixed Asset Turnover

question 18

Multiple Choice

Which of the following best expresses fixed asset turnover?

• A) Current assets/Fixed assets
• B) Revenue/Fixed assets
• C) Fixed assets/Total return to shareholders
• D) Fixed assets/Current liabilities

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Definitions:

Acid-Test Ratio

A liquidity metric that measures a company's ability to pay off its current liabilities with its quick assets without relying on inventory sales.

Times Interest Earned

A financial metric that measures a company's ability to meet its debt obligations by comparing its interest expenses to its earnings before interest and taxes (EBIT).

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term liquidity and operational efficiency.

Total Current Assets

The sum of all assets a company expects to convert into cash within one year, including cash, accounts receivable, and inventory.