John's company has a fixed asset turnover rate of 1.12 and a total asset turnover rate of 0.91. Sam's company has a fixed asset turnover rate of 1.15 and a total asset turnover rate of 0.88. Both companies have similar operations. Based on this information, John's company must be doing which one of the following? Select one: O a. utilizing its total assets more efficiently than Sam's O b. maintaining the same level of current assets as Sam's O c. generating $1 in sales for every $1.12 in net fixed assets O d. utilizing its fixed assets more efficiently than Sam's O e. generating $1.12 in net income for every $1 in net fixed assets
John's company has a fixed asset turnover rate of 1.12 and a total asset turnover rate of 0.91. Sam's company has a fixed asset turnover rate of 1.15 and a total asset turnover rate of 0.88. Both companies have similar operations. Based on this information, John's company must be doing which one of the following? Select one: O a. utilizing its total assets more efficiently than Sam's O b. maintaining the same level of current assets as Sam's O c. generating $1 in sales for every $1.12 in net fixed assets O d. utilizing its fixed assets more efficiently than Sam's O e. generating $1.12 in net income for every $1 in net fixed assets
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter13: Financial Statement Analysis
Section: Chapter Questions
Problem 13.15E
Related questions
Concept explainers
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
Topic Video
Question
Give typing answer with explanation and conclusion
![John's company has a fixed asset turnover rate of 1.12 and a total asset turnover rate of 0.91.
Sam's company has a fixed asset turnover rate of 1.15 and a total asset turnover rate of 0.88.
Both companies have similar operations.
Based on this information, John's company must be doing which one of the following?
Select one:
O a. utilizing its total assets more efficiently than Sam's
O b. maintaining the same level of current assets as Sam's
O c. generating $1 in sales for every $1.12 in net fixed assets
O d. utilizing its fixed assets more efficiently than Sam's
O e. generating $1.12 in net income for every $1 in net fixed assets](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdac7531a-83f5-44ee-b618-d494c4081190%2Fea2d2a82-48ca-43df-be46-c8d9b72433de%2Fmkhhk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:John's company has a fixed asset turnover rate of 1.12 and a total asset turnover rate of 0.91.
Sam's company has a fixed asset turnover rate of 1.15 and a total asset turnover rate of 0.88.
Both companies have similar operations.
Based on this information, John's company must be doing which one of the following?
Select one:
O a. utilizing its total assets more efficiently than Sam's
O b. maintaining the same level of current assets as Sam's
O c. generating $1 in sales for every $1.12 in net fixed assets
O d. utilizing its fixed assets more efficiently than Sam's
O e. generating $1.12 in net income for every $1 in net fixed assets
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Financial Accounting: The Impact on Decision Make…](https://www.bartleby.com/isbn_cover_images/9781305654174/9781305654174_smallCoverImage.gif)
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
![Financial And Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
![EBK CONTEMPORARY FINANCIAL MANAGEMENT](https://www.bartleby.com/isbn_cover_images/9781337514835/9781337514835_smallCoverImage.jpg)
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
![Financial Accounting: The Impact on Decision Make…](https://www.bartleby.com/isbn_cover_images/9781305654174/9781305654174_smallCoverImage.gif)
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
![Financial And Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
![EBK CONTEMPORARY FINANCIAL MANAGEMENT](https://www.bartleby.com/isbn_cover_images/9781337514835/9781337514835_smallCoverImage.jpg)
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT