Which of the following is the correct formula for the asset turnover ratio?
A)Net sales ÷ Average total assets
B)Net sales ÷ Cost of goods sold
C)Net Sales ÷ Net assets
D)Net profit ÷ Net sales

Question

Quizplus · Accepted Answer

The asset turnover ratio measures a company's ability to generate revenue from its assets. The formula for this ratio is Net sales ÷ Average total assets. None of the other options provide the correct formula for the asset turnover ratio.

Which of the Following Is the Correct Formula for the Asset