Asked by Yessenia Castro on Jun 28, 2024
Verified
To increase total asset turnover, management must either increase sales or reduce total stockholders' equity.
Total Asset Turnover
A financial ratio that measures a company's ability to generate sales from its assets by comparing sales revenue to total assets.
Stockholders' Equity
Represents the amount of financing provided by owners of the business and retained earnings.
- Execute the calculation and analysis of numerous financial ratios, among them total asset turnover, inventory turnover, and accounts receivable turnover.
- Comprehend the effects of changes in a company's financing structure on profitability and leverage ratios, such as return on assets, debt-to-equity ratio, and book value per share.
Verified Answer
ZK
Zybrea KnightJul 04, 2024
Final Answer :
False
Explanation :
Total asset turnover is increased by either increasing sales or reducing total assets, not by reducing total stockholders' equity.
Learning Objectives
- Execute the calculation and analysis of numerous financial ratios, among them total asset turnover, inventory turnover, and accounts receivable turnover.
- Comprehend the effects of changes in a company's financing structure on profitability and leverage ratios, such as return on assets, debt-to-equity ratio, and book value per share.
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