In 2012,DAL Co.had a fixed asset turnover of 1.63 compared to ABC Co.of 1.10.What is the most likely cause of DAL Co.'s higher ratio?
A)DAL Co.is less efficient in generating net sales from its operational assets.
B)DAL Co.is more efficient at generating profit from employing its operational assets.
C)DAL Co.is able to generate greater sales from its operational assets.
D)DAL Co.is able to generate less profit from its operational assets.

Question

Quizplus · Accepted Answer

The fixed asset turnover ratio measures how efficiently a company uses its fixed assets to generate sales. A higher ratio indicates that the company is generating more sales from its fixed assets, which suggests that DAL Co. is able to generate greater sales from its operational assets.