Assume that a particular firm has a total asset turnover ratio lower than the industry norm.In addition,this firm's current ratio and fixed asset turnover ratio also meet industry standards.Based on this information,we can conclude that this firm must have excessive
A)accounts receivable.
B)fixed assets.
C)debt.
D)inventory.

Question

Quizplus · Accepted Answer

The firm's total asset turnover is low, indicating inefficiency in using its assets to generate sales. Since the fixed asset turnover is normal, the issue likely lies with current assets, specifically excessive inventory.

Assume That a Particular Firm Has a Total Asset Turnover