Which of the Following Statements Is Inaccurate with Respect to the Total

question 37

Multiple Choice

Which of the following statements is inaccurate with respect to the total asset turnover ratio?

• A)The ratio is calculated as sales revenues divided by total assets at year-end.
• B)The ratio is decreased when additional plant and equipment is purchased.
• C)A high ratio implies efficient management of assets.
• D)The ratio is decreased when additional inventory is purchaseD.Total Asset Turnover = Sales (or Operating) Revenues ÷ Average Total Assets.

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