Question

dividing net sales by average total assets, indicates how efficiently a company is able to generate sales with a given amount of assets. It shows how many dollars of sales are generated by each dollar invested in assets. The higher the ratio, the more efficiently the company is operating. If the ratio is 1.25 times, then this means that for each dollar invested in assets, the company generates sales of $1.25. Asset turnover ratios vary considerably among industries.

Answer 1

The subject of this question is Business. Dividing net sales by average total assets is a financial ratio used to measure a company's efficiency in generating sales with its assets. A higher ratio indicates that the company is operating more efficiently.

Step-by-step explanation:

The subject of this question is Business.

Dividing net sales by average total assets is a financial ratio used to measure a company's efficiency in generating sales with its assets. It shows how many dollars of sales are generated for each dollar invested in assets. A higher ratio indicates that the company is operating more efficiently.

Example: If a company's asset turnover ratio is 1.25 times, it means that for every dollar invested in assets, the company generates $1.25 in sales.