The ________ Ratio Measures a Company's Ability to Generate Sales

question 84

Multiple Choice

The ________ ratio measures a company's ability to generate sales in relation to its assets.

• A)net sales-to-working capital
• B)net sales to total assets
• C)average collection period
• D)average inventory turnover

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Definitions:

Merchandiser

A person or company involved in the purchase and sale of goods. In accounting, it refers to a business that sells finished goods to consumers.

Cash Sales

Transactions in which the buyer pays for a good or service with cash at the time of purchase.

Purchases of Merchandise

Transactions involving the buying of goods for resale, typically used in retail or wholesale businesses.

Acid-Test Ratio

A financial metric that measures a company's immediate liquidity by comparing its most liquid assets to its current liabilities.