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Which of the following measures provides an indication of how efficient a company is in employing its assets?

(a)Current ratio.
(b)Profit margin.
(c)Debt to assets ratio.
(d)Asset turnover.

1 Answer

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Final answer:

Asset turnover is the measure that indicates how efficiently a company employs its assets. It is a financial ratio that compares sales revenue to the company's assets, revealing operational efficiency.

Step-by-step explanation:

The measure that provides an indication of how efficient a company is in employing its assets is (d) Asset turnover. Asset turnover is a financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue. The higher the asset turnover ratio, the more efficiently a company is said to be using its assets. The other options, such as the current ratio, profit margin, and debt-to-assets ratio, provide insights into the company's liquidity, profitability, and financial leverage, respectively, but not directly into the efficiency of asset utilization.

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