Question

Digby has an asset turnover of 1.57 (Asset Turnover = Sales/Assets). That means:_______

A) Every $1.57 of profit in the firm comes from each $1.00 of sales.
B) Each $1.00 of assets in the firm generates $1.57 of sales revenue.
C) Every $1.00 of assets in the firm generates $1.57 of profit.
D) Every $1.57 of assets in the firm generates $1.00 of sales.

Answer 1

correct option is B) Each $1.00 of assets in the firm generates $1.57 of sales revenue

Step-by-step explanation:

given data

asset turnover = 1.57

Asset Turnover = Sales ÷ Assets

to find out

what is Asset Turnover means

solution

as given that Asset Turnover = Sales ÷ Assets

we know Asset turnover is measures the company ability

and Asset turnover is generated sales from the assets it is known as Asset turnover

so as given asset turnover = 1.57 sale revenue is generated by every $1 assets in firm

so here correct option is B) Each $1.00 of assets in the firm generates $1.57 of sales revenue