To increase total asset turnover, management must either increase sales or reduce total stockholders' equity.

Total Asset Turnover

A financial ratio that measures a company's ability to generate sales from its assets by comparing sales revenue to total assets.

Stockholders' Equity

Represents the amount of financing provided by owners of the business and retained earnings.

Execute the calculation and analysis of numerous financial ratios, among them total asset turnover, inventory turnover, and accounts receivable turnover.
Comprehend the effects of changes in a company's financing structure on profitability and leverage ratios, such as return on assets, debt-to-equity ratio, and book value per share.

Verified Answer

Final Answer :

False

Explanation :

Total asset turnover is increased by either increasing sales or reducing total assets, not by reducing total stockholders' equity.

Learning Objectives

Execute the calculation and analysis of numerous financial ratios, among them total asset turnover, inventory turnover, and accounts receivable turnover.
Comprehend the effects of changes in a company's financing structure on profitability and leverage ratios, such as return on assets, debt-to-equity ratio, and book value per share.