Asset turnover equals
A) net sales divided by average total assets.
B) average total assets divided by net income.
C) average total assets divided by total liabilities.
D) net income divided by average total assets.

Question

Quizplus · Accepted Answer

Asset turnover is a measure of a company's efficiency in using its assets to generate revenue. It is calculated by dividing the net sales by the average total assets. Option A correctly represents this formula. Option B represents the return on assets ratio, option C represents the debt-to-assets ratio, and option D represents the return on investment ratio.

Asset Turnover Equals