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Total Assets ₹50 lakh; Sales ₹2 crore. Total Assets Turnover Ratio is:
A2 times
B3 times
C5 times
D4 times
Answer & Solution
Correct answer: D. 4 times
1. Total Assets Turnover = Sales / Total Assets = 2,00,00,000 / 50,00,000.
2. Result = 4 times.
3. A higher ratio indicates efficient utilisation of total assets.
_Source: ICAI BoS CA Inter Paper 6A, Ch 3 "Financial Analysis and Planning — Ratio Analysis", §3.3(a)_
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