Which one of the following formulas represents an asset utilization ratio?
A) Net income/Total assets
B) Price per share/Earnings per share
C) (Current assets - Inventory)/Current liabilities
D) Sales/Net working capital
E) Earnings before interest and taxes/Interest

Question

Quizplus · Accepted Answer

Asset utilization ratios measure how efficiently a company uses its assets to generate sales or revenue. The formula "Sales/Net working capital" is an example of an asset utilization ratio, as it shows how effectively a company is using its working capital to generate sales.

Which One of the Following Formulas Represents an Asset Utilization