A Company Has Computed That Their "Asset Turnover" Is 3

question 137

Multiple Choice

A company has computed that their "asset turnover" is 3. Which of the following statements is the best interpretation of these results?

• A) For every $3 of sales, $1 of net profit is generated.
• B) For every $3 invested in assets, $1 in net profit is generated.
• C) For every $1 invested in assets, $3 in sales are generated.
• D) For every $3 invested in assets, $1 in sales are generated.