Which of the following statements is true? a. The tangible capital asset turnover ratio assists managers in determining the estimated future capital expenditures that are needed. b. The average age of the tangible capital assets is computed by dividing accumulated depreciation by depreciation expense. c. If net sales increases, the tangible capital asset turnover ratio will decrease. d. A relatively low tangible capital asset turnover ratio signals that a company is efficiently using its assets.

Which of the following statements is true? a. The tangible capital asset turnover ratio assists managers in determining the estimated future capital expenditures that are needed. b. The average age of the tangible capital assets is computed by dividing accumulated depreciation by depreciation expense. c. If net sales increases, the tangible capital asset turnover ratio will decrease. d. A relatively low tangible capital asset turnover ratio signals that a company is efficiently using its assets.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 12MCQ: Which of the following statements is true? a. The fixed asset turnover ratio assists managers in...

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13. Which of the following statements is true? a.The tangible capital asset turnover ratio assists managers in determining the estimated future capital expenditures that are needed. b.The average age of the tangible capital assets is computed by dividing accumulated depreciation by depreciation expense. c.If net sales increases, the tangible capital asset turnover ratio will decrease. d.A relatively low tangible capital asset turnover ratio signals that a company is efficiently using its assets.
A. Which of the following is most closely associated with the cost of using assets? a. Asset utilization b. Sales revenue c. Proportion of debt and equity d. Average price B. Which of the following is most closely associated with the return on management’s use of assets? a. Cost of capital b. Mix of equity types c. Prime lending rate d. # of products sold
Under the Dupont Technique, which of the following is false? -Asset management, as represented by the ratio of net sales and average equity, is one of the factors that is considered in deriving the return on assets. -Dupont Technique reveals the factors that determines the firm’s return on asset. -The Company’s assessment of asset utilization and profitability can be determined by the Dupont Technique. -The return on asset is the computed by multiplying the return on sales and the asset turnover.
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Why is the operating return on assets ratio also referred to as the operating returnon investment?