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26 August, 23:33

Which of these statements is true? Group of answer choices

In general, the lower the total asset turnover and the lower the capital intensity ratio, the more efficient the overall asset management of the firm will be.

In general, the higher the total asset turnover and the lower the capital intensity ratio, the more efficient the overall asset management of the firm will be.

In general, the lower the total asset turnover and the higher the capital intensity ratio, the more efficient the overall asset management of the firm will be.

In general, the higher the total asset turnover and the higher the capital intensity ratio, the more efficient the overall asset management of the firm will be.

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  1. 27 August, 01:09
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    In general, the higher the total asset turnover and the lower the capital intensity ratio, the more efficient the overall asset management of the firm will be.

    Explanation:

    Asset Turnover = Net Sales / Total Asset

    Capital Intensity = Total Asset / Net Sales

    According to the above formulas most efficient situation will be to increase the asset turnover and decrease the capital intesity ratio because they are reciprocal to each other, so thses will behave inversly with each other. Higher turnover means the higher sales using total asset and lower capital intensity ratio means asset are lower timesto the net sales which is an efficient use of asset.
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