Which ratio measures how effectively a company is using assets to generate revenue?
A)Net margin
B)Asset turnover
C)Plant assets to long-term liabilities
D)Inventory turnover

Question

Quizplus · Accepted Answer

Asset turnover indicates how many sales dollars are generated per dollar of asset. Net Margin is the percentage of each dollar of sales remaining after all expenses are paid, plant assets to long-term liabilities indicates how well long-term debt is managed and inventory turnover indicates the number of times, on average inventory is replaced each year.

Which Ratio Measures How Effectively a Company Is Using Assets