A firm with total asset turnover lower than the industry average may have

Question

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Total asset turnover is calculated by dividing a company's net sales by its total assets. A lower total asset turnover indicates that the company is generating less revenue per dollar of assets compared to the industry average. This could be due to lower sales, inefficient use of assets, or a combination of both. Excessive debt or cost of goods sold and insufficient fixed assets may impact the company's profitability but are not directly related to the total asset turnover ratio.

A Firm with Total Asset Turnover Lower Than the Industry