Total Asset Turnover Is Equal to Accounts Receivable Turnover Plus

question 139

True/False

Total asset turnover is equal to accounts receivable turnover plus inventory turnover plus fixed asset turnover.

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Definitions:

Suppliers

Entities or individuals that provide goods or services to another entity or individual, usually in a business-to-business context.

Time Period Assumption

An accounting principle that the life of a business can be divided into discrete time periods, such as months and years, for reporting purposes.

Operating Cycle

The duration of time it takes for a company to purchase inventory, sell the goods, and collect cash from the sale.

Dividends Declared

A firm's announcement of the payment of a dividend to shareholders by a specified date, representing a commitment to distribute a portion of earnings.