Assume That a Particular Firm Has a Total Asset Turnover

question 87

Multiple Choice

Assume that a particular firm has a total asset turnover ratio lower than the industry norm. In addition, this firm's current ratio and fixed asset turnover ratio also meet industry standards. Based on this information, we can conclude that this firm must have excessive

• A) current liabilities.
• B) fixed assets.
• C) long-term debt.
• D) current assets.

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Definitions:

Capital Goods

These are physical assets used in the production process to manufacture goods and services, including buildings, machinery, and equipment.

Consumer Goods

Products and services that are consumed or used by individuals, as opposed to those purchased by businesses or industries.

Technological Improvements

Enhancements and innovations in technology that increase productivity, efficiency, or value in processes or products.

Additional Resources

Refers to extra assets or inputs available that can be used to enhance the production or efficiency of something.