What does a low asset turnover compared to the industry imply?
A)The investment in assets may be too high.
B)Sales are higher than average.
C)The investment in assets is too low.
D)Net income is low relative to the investment in assets.

Question

Quizplus · Accepted Answer

A low asset turnover compared to the industry implies that the investment in assets may be too high. This means that the company is not efficiently utilizing its assets to generate sales, resulting in a lower asset turnover ratio compared to the industry average.

What Does a Low Asset Turnover Compared to the Industry