Question

A decrease in the fixed asset turnover ratio from 3.0 to 2.2 indicates a.an unfavorable change in the efficiency of using fixed assets to pay down debt. b.an unfavorable change in the efficiency of using cash to generate sales. c.a favorable change in the efficiency of using fixed assets to generate sales. d.an unfavorable change in the efficiency of using fixed assets to generate sales.

Answer 1

d.an unfavorable change in the efficiency of using fixed assets to generate sales.

Step-by-step explanation:

Since as we can see in the given situation that there is the reduction in the fixed asset turnover ratio i.e. it is reduced from 3 to 2.2 this means that there is a change i.e. unfavorable or non-favorable with respect to the efficiency of applying the fixed asset in order to producing or generating the sales

Therefore the option d is correct