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FINANCIAL ANALYSIS: An analyst calculates asset efficiency. What is the total asset turnover ratio? (1) Annual revenue is $18M and total assets are $12M (2) The company generates $1.50 in revenue for every dollar of assets

GMAT · 2022 · Data Insights
Question:
FINANCIAL ANALYSIS: An analyst calculates asset efficiency. What is the total asset turnover ratio? (1) Annual revenue is $18M and total assets are $12M (2) The company generates $1.50 in revenue for every dollar of assets

Options

(A) Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient
(B) Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient
(C) BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient
(D) EACH statement ALONE is sufficient
(E) Statements (1) and (2) TOGETHER are NOT sufficient
Answer: (D) EACH statement ALONE is sufficient

Explanation:
Statement (1): Asset turnover = $18M/$12M = 1.5. Sufficient. Statement (2): This directly states the asset turnover ratio is 1.5. Sufficient.

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