Asked by Ashley Friend on Jul 03, 2024
Verified
The asset turnover ratio is calculated as net sales divided by ending total assets.
Asset Turnover Ratio
A financial metric that measures the efficiency of a company in generating sales from its assets.
Net Sales
The revenue from goods or services sold after deducting returns, allowances for damaged or missing goods, and discounts.
Total Assets
The sum of all current and non-current assets owned by a company, representing its total economic resources.
- Calculate and interpret the asset turnover ratio.
Verified Answer
AZ
alejandro zelayaJul 09, 2024
Final Answer :
False
Explanation :
The asset turnover ratio is calculated as net sales divided by average total assets, not ending total assets.
Learning Objectives
- Calculate and interpret the asset turnover ratio.