Questions
Single choice
Asset utilization ratios measure
Options
A.how much debt the firm is using relative to other sources of financing.
B.the speed with which a company can turn its short-term assets into cash to pay off its short-term debts.
C.how much income a firm generates relative to its assets, equity, and sales.
D.the performance of the firm relative to others on a per-share basis.
E.how well a firm uses its assets to generate each $1 of sales.
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Step-by-Step Analysis
Question: Asset utilization ratios measure
Option 1: "how much debt the firm is using relative to other sources of financing." This describes a financing mix or leverage, not asset utilization. It confuses capital structure with how efficiently assets are used to generate sales.
Option 2: "the speed with which a company can......Login to view full explanationLog in for full answers
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