Fill in the blank for part A and B. A. Higher margin businesses ________________________ than lower margin businesses. a. Usually use the same amount of operating assets b. Can use more operating assets c. Must use fewer operating assets d. Must have a higher asset utilization B. A lower margin business must have to be successful. a. Lower asset utilization b. Medium asset utilization c. Higher asset utilization d. Low sales revenue relative to its operating assets
Fill in the blank for part A and B. A. Higher margin businesses ________________________ than lower margin businesses. a. Usually use the same amount of operating assets b. Can use more operating assets c. Must use fewer operating assets d. Must have a higher asset utilization B. A lower margin business must have to be successful. a. Lower asset utilization b. Medium asset utilization c. Higher asset utilization d. Low sales revenue relative to its operating assets
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 12MCQ: Which of the following statements is true? a. The fixed asset turnover ratio assists managers in...
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Fill in the blank for part A and B.
A. Higher margin businesses ________________________ than lower margin businesses.
a. Usually use the same amount of operating assets
b. Can use more operating assets
c. Must use fewer operating assets
d. Must have a higher asset utilization
B. A lower margin business must have to be successful.
a. Lower asset utilization
b. Medium asset utilization
c. Higher asset utilization
d. Low sales revenue relative to its operating assets
Expert Solution
Step 1:- Explanations
Net Margin or net profit margin:- It is the measure of how net profit or net income is generated as a percentage of revenue or sales. It is one of the most important measures of the financial health of the company.
Net profit margin = (Net Income / Total Revenue) * 100
A higher margin means the company is utilizing its operating assets more effectively to convert sales into its profit and vice-versa.
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