The asset turnover ratio a. considers how much revenue a firm is able to generate relative...
The asset turnover ratio
a. considers how much revenue a firm is able to generate relative to its assets base
b. affects the firm's ROE in that a higher ratio increases ROE and a lower ratio decreases ROE other things equal
c. captures the capital intensity of a business: the more capital intense a firm is, the lower its asset turnover
d. all of the above
Homework Answers
d. all of the above:
Asset turnover ratio = Turnover / Total assets, which evaluates the relationship between the assets and turnover of the company. ROE and ROA have relationship and when the firm is capital intensive, it will generate less revenue compared to its assets which will lower the asset turnover ratio
Add Answer to:
The asset turnover ratio
a. considers how much revenue a firm is able to generate
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their roe to 9.1%
a. what is this firms profit margin?
b. if the company were able to improve its total asset turnover to
1.8, what would be their new roe?
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