Final answer:
When a company has a higher Asset Turnover, it means that the company is more efficient in using its assets to generate sales. However, it doesn't necessarily mean that Company A has higher sales than Company B or that Company A has fewer assets than Company B.
Step-by-step explanation:
When a company has a higher Asset Turnover, it means that the company is more efficient in using its assets to generate sales. This means statement 2 is true: Company A is more efficient in using its assets to produce sales than Company B.
However, higher Asset Turnover does not necessarily mean that Company A has higher sales than Company B, so statement 1 may not be true.
The Asset Turnover ratio is calculated by dividing net sales by average total assets. If Company A has a higher Asset Turnover, it means that Company A is generating more sales relative to its assets compared to Company B. This does not provide information about the actual sales figures of the two companies.
Furthermore, the Asset Turnover ratio does not provide information about the total assets of the two companies. It only indicates how efficiently a company is using its assets to generate sales. Therefore, statement 3 cannot be determined based on the given information.