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Unformatted text preview: Asset turnover measures how a company uses its assets to generate new sales. Net sales, divided by the average of each asset determines how well a company is doing. Solvency - Debt to asset ratio. Debt to Asset ratio measures the total assets that have been provided by creditors. Divide total long-term and short-term debt against the total assets. Each of these ratios is important because they generate a snapshot of the fiscal stability of a business. Also, they help to ease the concerns of creditors that might question the need for additional capital. Personally, I feel that the profitability information would be the most useful information to investors and creditors....
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This note was uploaded on 12/13/2011 for the course ACCOUNTING ACC 280 taught by Professor Kenfredrickson during the Spring '09 term at University of Phoenix.
- Spring '09