A firm has lower inventory turnover,a longer ACP,and a lower fixed-asset turnover than the industry averages.You should not be surprised to find that this firm has _____________.
I.lower ATO than the industry average
II.lower ROA than the industry average
III.lower ROE than the industry average
A) I only
B) I and II only
C) II and III only
D) I, II and III

Question

Quizplus · Accepted Answer

A lower inventory turnover, longer average collection period (ACP), and lower fixed-asset turnover suggest inefficient use of assets, leading to a lower asset turnover (ATO). This inefficiency typically results in a lower return on assets (ROA) and, consequently, a lower return on equity (ROE) compared to industry averages.

A Firm Has Lower Inventory Turnover,a Longer ACP,and a Lower