It Is Appropriate to Use the Fixed Assets Turnover Ratio

question 99

True/False

It is appropriate to use the fixed assets turnover ratio to appraise firms' effectiveness in managing their fixed assets if and only if all the firms being compared have the same proportion of fixed assets to total assets.

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Definitions:

Payroll Records

Documentation related to employees’ pay, including details of salaries, wages, bonuses, deductions, and taxes, maintained by an employer.

Journal Entry

An accounting entry documenting the specifics of a financial deal.

Current Liability

A company's debts or obligations that are due within one year.

Operating Activities

These involve the primary, day-to-day activities of producing goods or providing services, which generate most of the company's revenue.