Which of the Following Is True of Asset Turnover Ratio

question 61

Multiple Choice

Which of the following is true of asset turnover ratio?

• A)It measures how efficiently a business uses its sales to finance the assets.
• B)It measures how efficiently a business uses its average total assets to generate sales.
• C)It measures how efficiently a business uses its net profit to finance the assets.
• D)It measures how the ending inventory helps in increasing the value of assets.

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Definitions:

Pearson Correlation

A coefficient that measures the linear correlation between two variables X and Y, giving a value between -1 and 1.

Coefficient

A multiplicative factor in mathematical expressions, often used to describe the relationship between variables in statistical models.

Research Hypothesis

Statement regarding an expected or predicted relationship between variables.

Ordinal Variables

Variables that represent categories with a natural order or ranking, but where the distances between categories are not necessarily equal.