Asset-utilization ratios measure all of the following except:
A)productivity of fixed assets in terms of sales.
B)the relationship of sales on the income statement to various assets on the balance sheet.
C)how many times per year the inventory is sold and accounts receivable collected.
D)the firm's ability to pay off short-term obligations as they come due.

Question

Quizplus · Accepted Answer

With asset-utilization ratios, we measure the speed at which the firm is turning over accounts receivable, inventory, and longer-term assets. In other words, asset-utilization ratios measure how many times per year a company sells its inventory or collects its accounts receivable. For long-term assets, the utilization ratio tells us how productive the fixed assets are, in terms of sales generation.

Asset-Utilization Ratios Measure All of the Following Except