Question

Nemfembo, a pharmaceutical company, gains most of its net income by outsourcing its manufacturing plants to foreign countries. For every product it manufactures, the demand for those products becomes more pronounced. Which of the following financial ratio analyses can be used to measure how effectively Nemfembo is using its resources to generate revenues?A. Asset management ratios
B. Capital budgeting ratios
C. Leverage ratios
D. Profitability ratios

Answer 1

Answer:

A. Asset management ratios

Explanation:

Asset management ratios -

It is the ration , which helps to compare the assets of the company with respect to the revenues made by sales .

This ratio helps to determine that how successful is a particular company for utilizing their assets to generate the revenue .

Hence , Asset management ratios is used to measure how effectively Nemfembo is using its resources to generate revenues .