Ratios that measure how efficiently a firm uses its assets to generate sales are known as:
A) Asset management ratios.
B) Long-term solvency ratios.
C) Short-term solvency ratios.
D) Profitability ratios.
E) Market value ratios.

Question

Quizplus · Accepted Answer

Asset management ratios, also known as turnover ratios or efficiency ratios, measure how efficiently a firm uses its assets to generate sales. These ratios are crucial for analyzing the effectiveness of a company's management in utilizing its assets.

Ratios That Measure How Efficiently a Firm Uses Its Assets