ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Retail companies
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Infrastructure companies
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Power companies
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Heavy machinery companies
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Detailed explanation-1: -Supermarket-High asset turnover. Supermarkets tend to be high volume businesses.
Detailed explanation-2: -Retail and consumer staples, for example, have relatively small asset bases but have high sales volume-thus, they have the highest average asset turnover ratio. Conversely, firms in sectors such as utilities and real estate have large asset bases and low asset turnover.
Detailed explanation-3: -In the retail sector, an asset turnover ratio of 2.5 or more could be considered good, while a company in the utilities sector is more likely to aim for an asset turnover ratio that’s between 0.25 and 0.5.
Detailed explanation-4: -The retail sector has an average asset turnover of 1.9, with poorer performers in the sector averaging 0.8 and the better ones showing an average of 3.2.
Detailed explanation-5: -Research shows that retailers see an average inventory turnover ratio of 10.86. This means retailers restock their entire inventory over 10 times per year.