Question

In: Finance

The total asset turnover should generally be higher in value than the fixed-asset turnover. A. True...

The total asset turnover should generally be higher in value than the fixed-asset turnover.

A. True

B. False

Solutions

Expert Solution

False.

The statement is wrong. Fixed asset turnover is generally higher than the total asset turnover.

Total asset turnover = Net sales / Total assets

Fixed asset turnover = Net sales / Fixed assets

The fixed asset is always less than the total assets. Thus, the total asset turnover should be less than the fixed-asset turnover.

jeff jeffy answered 2 years ago
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