A company that has a high level of inventory and other assets above their investment in property,plant and equipment should calculate the total asset turnover ratio in addition to the fixed asset turnover ratio.

Question

Quizplus · Accepted Answer

The total asset turnover ratio includes total assets in its denominator and should be calculated for those companies with large amounts of inventory and accounts receivable in addition to fixed assets.

A Company That Has a High Level of Inventory and Other