If upper management is NOT satisfied with a division's asset turnover ratio, which of the following strategies would they most likely recommend?
A) Reduce the level of assets owned by the division
B) Reduce either product costs or operating expenses or both
C) Invest in more assets for the division
D) Locate new equity investment funds

Question

Quizplus · Accepted Answer

Reducing the level of assets owned by the division would increase the asset turnover ratio, as this ratio is calculated by dividing sales by assets. Reducing assets while maintaining or increasing sales would improve the ratio.

If Upper Management Is NOT Satisfied with a Division's Asset