__________ best explains a ratio of (sales/average net fixed assets)that exceeds the industry average.
A)The firm expanded plant and equipment in the past few years
B)The firm makes less efficient use of assets than competing firms
C)The firm has a substantial amount of old plant and equipment
D)The firm uses straight-line depreciation
E)None of the above

Question

Quizplus · Accepted Answer

Older plant and equipment are likely to be more depreciated, resulting in lower net fixed assets, which can increase the sales to average net fixed assets ratio.

__________ Best Explains a Ratio of (Sales/average Net Fixed Assets)that