if a firm\'s total asset turnover is low, but it\'s fixed asset turnover is high
ID: 2730044 • Letter: I
Question
if a firm's total asset turnover is low, but it's fixed asset turnover is high, which of the following ratios should an analyst examine to locate the source of the problem?- price/ earnings -times interest earned - debt/ equity - accounts receivable turnover - return on equity if a firm's total asset turnover is low, but it's fixed asset turnover is high, which of the following ratios should an analyst examine to locate the source of the problem?
- price/ earnings -times interest earned - debt/ equity - accounts receivable turnover - return on equity if a firm's total asset turnover is low, but it's fixed asset turnover is high, which of the following ratios should an analyst examine to locate the source of the problem?
- price/ earnings -times interest earned - debt/ equity - accounts receivable turnover - return on equity
Explanation / Answer
Answer : accounts receivable turnover ratio
=> if a firm's total asset turnover is low, but it's fixed asset turnover is high. It means that the current assets is having higher weightage in the total assets, so a ratio concerning currrent assets is helpful to locate the source of the problem. Thus the answer is accounts receivable turnover ratio.
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