All other things remaining the same, if the revenue or sales decreases, asset turnover ratio will
A) Decrease
B) Increase
C) Stay the same
D) Will decrease, but the amount of change will depend on the profit margin
E) Decrease and Will decrease, but the amount of change will depend on the profit margin

Question

Quizplus · Accepted Answer

The asset turnover ratio is calculated as revenue divided by average total assets. If revenue decreases while assets remain constant, the ratio will decrease.

All Other Things Remaining the Same, If the Revenue or Sales