Total asset turnover is used to evaluate:
A)The efficiency of management's use of assets to generate sales.
B)The need for asset replacement.
C)The number of times operating assets were sold during the year.
D)The cash flows used to acquire assets.
E)The relation between asset cost and book value.

Question

Quizplus · Accepted Answer

Total asset turnover is a financial ratio that measures how efficiently a company is using its assets to generate sales revenue. It is calculated by dividing net sales by average total assets, and a higher ratio indicates that the company is using its assets more efficiently to generate revenue. Therefore, option A is the correct answer. Options B, C, D, and E are not relevant to the calculation of total asset turnover.

Total Asset Turnover Is Used to Evaluate