A declining fixed asset turnover ratio suggests that a:
A)company is not as efficient in using its fixed assets as it was in previous periods.
B)company's net sales must be increasing.
C)company must have purchased some intangible assets.
D)company's beginning fixed asset balance must be greater than its ending fixed asset balance.

Question

Quizplus · Accepted Answer

The fixed asset turnover ratio will fall if average net fixed assets increase or if net sales decrease.This suggests the company is not as efficient in using its fixed assets to generate sales as it was in previous periods.

A Declining Fixed Asset Turnover Ratio Suggests That A