Which of the following situations represents an effective use of assets
A) Earning a larger amount of profit per currency unit of sales revenue.
B) Increasing sales revenue faster than gross asset growth.
C) Depreciating tangible assets using an accelerated depreciation method.
D) Divesting assets when sales revenue declines to keep the ratio of sales to assets constant.

Question

Quizplus · Accepted Answer

Increasing sales revenue faster than gross asset growth indicates that the company is utilizing its assets effectively to generate more revenue without having to invest in additional assets. This represents an efficient use of assets.

Which of the Following Situations Represents an Effective Use of Assets