Retail Industry Asset Turnover Ratio Compared to Auto Industry | Exam Prep

Asset Turnover Ratio: Retail Industry vs. Auto Industry

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Question

The retail industry has __________ asset turnover ratio compared to that of a capital intensive industry like the auto industry.

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A

Total asset turnover = net sales/average total assets Since the auto industry is highly capital intensive compared to the retail industry, it require far more capital assets to generate the same revenues as the retail industry.