All other things remaining the same, if the sales revenue increases, asset turnover ratio will
A)Increase
B)Decrease
C)Stay the same
D)may increase or decrease
E)there is no way to tell for sure

Question

Quizplus · Accepted Answer

Asset turnover ratio is calculated by dividing sales revenue by total assets. If the sales revenue increases while total assets remain constant, the ratio will increase. This is because the company is generating more revenue from the same level of assets, indicating better efficiency in asset utilization.

All Other Things Remaining the Same, If the Sales Revenue