A Firm with a Total Asset Turnover Lower Than the Industry

question 135

Multiple Choice

A firm with a total asset turnover lower than the industry standard and a current ratio which meets the industry standard may have

• A)excessive current assets.
• B)excessive inventory.
• C)excessive accounts receivable.
• D)excessive debt.
• E)none of the above

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Definitions:

Idle Capacity

Unused or unutilized production capacity within a business, often leading to inefficiency and increased costs.

Constrained Resource

A limited resource that restricts a company's ability to meet demand, such as limited machine time or labor hours.

Automated Factory

An automated factory utilizes advanced machinery and computer systems to perform tasks with minimal human intervention, increasing efficiency and production.

Porcelain Dip Bowl

A specific type of serving bowl made from porcelain, typically used for dipping sauces or small appetizers.