Sparks, Inc. has a fixed asset turnover ratio of 9 times. In contrast, the ratio is 4 times for most other firms in its industry. Which one of the following statements would provide the best explanation for this difference? A. Sparks has much older plant facilities than the rest of the industry. B. Sparks has a higher net profit margin percentage. C. Sparks uses just-in-time (JIT) techniques to minimize investment in finished goods. D. Sparks gives short payment terms to its customers which result in fast collections.

Sparks, Inc. has a fixed asset turnover ratio of 9 times. In contrast, the ratio is 4 times for most other firms in its industry. Which one of the following statements would provide the best explanation for this difference? A. Sparks has much older plant facilities than the rest of the industry. B. Sparks has a higher net profit margin percentage. C. Sparks uses just-in-time (JIT) techniques to minimize investment in finished goods. D. Sparks gives short payment terms to its customers which result in fast collections.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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