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Which of the following is an asset utilization ratio? Multiple Choice return on assets receivables turnover...

Which of the following is an asset utilization ratio? Multiple Choice

return on assets

receivables turnover

return on equity

current ratio

quick ratio

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Answer #1

The correct answer is receivables turnover

Asset utilization ratio is a measure to determine the ability to the business to generate revenues from its assets. The receivables turnover is one of the example of asset utilization ratio. The receivable turnover ratio helps a business to determine how effective it has been in collecting the payments from the customers to whom the credit sales are made. A high receivables turnover ratio indicates that the business has been able to collect payments from the customers quickly and in a timely manner. The inventory turnover ratio is also an example of asset utilization ratio.

  • Return on asset and Return on equity are examples Profitability ratios.
  • Current and Quick ratio are examples of Liquidity Ratios.
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