Which of the following ratios is the best measure for analyzing a company's efficiency in using assets to produce sales revenues?
A)current ratio
B)return on assets
C)asset turnover ratio
D)debt-to-total assets ratio

Question

Quizplus · Accepted Answer

The asset turnover ratio measures the efficiency of a company in using its assets to generate revenue. It is calculated by dividing the company's net sales by its average total assets. The higher the ratio, the more efficiently the company is using its assets to generate revenue. Therefore, asset turnover ratio is the best measure for analyzing a company's efficiency in using assets to produce sales revenues.

Which of the Following Ratios Is the Best Measure for Analyzing