A fixed asset turnover ratio of 0.72 means that: A. For every $1 in net fixed...

A fixed asset turnover ratio of 0.72 means that:

	A.	For every $1 in net fixed assets, a firm can generate $0.72 in net income.
	B.	For every $1 in net fixed assets, a firm can generate $0.72 in sales.
	C.	For every $1 in total assets, a firm can generate $0.72 in net income.
	D.	For every $1 in net fixed assets, a firm can borrow $0.72.
	E.	For every $1 in total assets, a firm can generate $0.72 in sales.

Expert Solution

A fixed asset turnover ratio of 0.72 means that:

"B. For every $1 in net fixed assets, a firm can generate $0.72 in sales."

Note:

1) Formula of Fixed asset turnover = Net Sales / Net Fixed assets

So, if the net sales is $0.72 and Net fixed assets is $1 then fixed asset turnover will be 0.72.

2) Net fixed assets = Tota assets - Accumulated Depreciation.

jeff jeffy answered 3 years ago

A firm has a net profit margin of 4.5%, a total asset turnover of 0.72, and...

A firm has a net profit margin of 4.5%, a total asset turnover of 0.72, and a financial leverage multiplier of 1.43. 1. Calculate the firm's ROA and ROE. 2. What is the advantage to using the DuPont system to calculate ROE over the direct calculation of earnings available for common stockholders divided by common stock equity?

Using the information shown, what is the asset turnover ratio? Net Income $500,500 Net Sales $379,000...

Using the information shown, what is the asset turnover ratio? Net Income $500,500 Net Sales $379,000 Current Assets $750,000 Current Libabilities $212,000 Average Assets $875,000

net profit margin ratio, return on asset ratio, inventory turnover ratio which ratios you found most...

net profit margin ratio, return on asset ratio, inventory turnover ratio which ratios you found most helpful in explain your company’s financial performance and why

Current Ratio: Asset Turnover Ratio: Inventory Turnover Ratio: Days In Sales Inventory Ratio: Gross Margin Ratio:...

Current Ratio: Asset Turnover Ratio: Inventory Turnover Ratio: Days In Sales Inventory Ratio: Gross Margin Ratio: Earning Per Share Ratio: Discuss what each ratio indicates about company performance. What does each ratio “tell” about a company? Interpret the ratios and use the interpretation as a basis to analyze the operational effectiveness .

Company A has an Asset turnover ratio of .531, return on asset ratio of .127, and...

Company A has an Asset turnover ratio of .531, return on asset ratio of .127, and return on equity of .165. What does that tell me about company A? Company B has an Asset turnover ratio of 1.553, return on asset ratio of .012, and return on equity of .07. What does that tell me about company B? Compare Company A to Company B. The industry average has an Asset turnover ratio of .81, return on asset ratio of .113,...

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

(Chapter 3) Delfino's has a fixed asset turnover rate of 1.3 and a total asset turnover...

(Chapter 3) Delfino's has a fixed asset turnover rate of 1.3 and a total asset turnover rate of 0.92. Frederick's has a fixed asset turnover rate of 1.2 and a total asset turnover rate of 1.03. Both companies have similar operations. Delfino's is: Group of answer choices utilizing its total assets more efficiently than Frederick's. utilizing its fixed assets more efficiently than Frederick's. generating $1 in sales for every $1.30 in net fixed assets. generating $1.30 in net income for...

Calculate the growth rate given the following: – Net profit margin 4% – Fixed asset turnover&

Calculate the growth rate given the following: – Net profit margin 4% – Fixed asset turnover 3.5 – Total asset turnover 2.2 – Total assets/equity 2.4 – Dividend payout ratio 45% A. 9.5% B. 11.6% C. 18.5%

Compute Financial ratios Current Ratio, Quick Ratio, Reeivables turnover, Inventory turnover, Profit margin, Asset turnover, Return...

Compute Financial ratios Current Ratio, Quick Ratio, Reeivables turnover, Inventory turnover, Profit margin, Asset turnover, Return on assets, Return on equity, Earnings per Share, Price-earnings, Cash Dicidend payot, Debt Ratio, Debt-to-Equity, and Times Interest earned Orange Company Income Statement For the Years Ended December 31 2013 2012 Net sales (all on account) $ 600,000 $ 520,000 Expenses: Cost of Goods Sold $ 415,000 $ 354,000 Selling and administrative $ 120,800 $ 114,600 Interest Expense $ 7,800 $ 6,000 Income Tax...

Chilly Moose Fruit Producer has a total asset turnover ratio of 6.00x, net annual sales of...

Chilly Moose Fruit Producer has a total asset turnover ratio of 6.00x, net annual sales of $25 million, and operating expenses of $11 million (including depreciation and amortization). On its balance sheet and income statement, respectively, it reported total debt of $2.50 million on which it pays a 7% interest rate. To analyze a company’s financial leverage situation, you need to measure the firm’s debt management ratios. Based on the preceding information, what are the values for Chilly Moose Fruit’s...

Question