Which of the following statements is incorrect?

A) Purchasing fixed assets through equity financing decreases total asset turnover.
B) Accruing an expense decreases earnings per share.
C) The return on equity ratio increases when treasury stock is purchased.
D) The purchase of fixed assets will cause the total asset turnover to increase.

Total Asset Turnover

A metric that evaluates how effectively a company utilizes its assets to produce sales income.

Treasury Stock

Shares that were issued and subsequently reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Fixed Assets

Long-term tangible assets used in the operation of a business that are not intended to be sold within a year, such as buildings, machinery, and equipment.