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which of the following is true regarding asset management ratios

Which of the following is true regarding Asset Management Ratios? I. They measure the companys ability to use its assets to
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Answer #1

Correct statement is e. II and III Only.

Explanation-

Asset Management ratios analyze how effectively the firm is managing its assets to generate sales. It measures the productivity of the assets of the business.

Asset management or turnover ratios are

1. The inventory turnover ratio - measures the inventory sold and replaced by the company during a certain period of time.

2. Receivables Turnover =Sales/Accounts Receivable

3. The fixed asset turnover ratio -it measures the efficiency of the firm's plant and equipment.

4. The net working capital turnover ratio -the turnover divided by the net current assets of the company.

5. The total asset turnover ratio - It shows the assets efficiency in generating total sales.

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