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A- net sales ÷ assets B- assets ÷ net sales C- net sales × assets D- net sales - assets
the answer is C- net sales × assets
My answer is letter A- net sales ÷ assets.
Answer A
Assets turnover = Net sales/Average total assets
The amount of sales or revenues generated per dollar of assets. The Asset Turnover ratio is an indicator of the efficiency with which a company is deploying its assets.
Asset Turnover = Sales or Revenues/Total Assets
Generally speaking, the higher the ratio, the better it is, since it implies the company is generating more revenues per dollar of assets. But since this ratio varies widely from one industry to the next, comparisons are only meaningful when they are made for different companies in the same sector.
The Asset Turnover ratio is also a key component of DuPont Analysis, which breaks down Return on Equity into three parts, the other two being profit margin and financial leverage.
Net Sales / Total Assets
(A) is the Correct Ans.
Net Sale / Assets
A-
net sales ÷ assets
Asset turnover is equal to net sales divided by the average total assets and this measure shows asset's ability to generate revenues and output is the number of times
B-Assets/ Net Sales is equal to Assets Turnover.
