Definition of Asset Turnover
Asset turnover is the sales to asset ratio. It briefly shows how efficiently and effectively a company is using its assets to make sales.
So, if a company’s asset turnover ratio is higher, it indicates that the company is utilizing its resources in an efficient way to generate revenues. On the contrary, if the company’s asset turnover ratio is lower, it shows that the company is not utilizing its assets in order to generate higher revenues.
Total Sales = Annual sales total
Beginning Assets = Assets at the start of the year
Ending Assets = Assets at end of year
View More Corporate Finance Definitions
Related Questions of Asset Turnover
Refer to the financial statements of American Eagle Outfitters (Appendix B
Massa Company, which has been operating for three years, provides
Financial statements for Askew Industries for 2018 are shown below (in
Ramirez Company is completing the information processing cycle at its fiscal year
FedEx Corporation and United Parcel Service, Inc. compete in the
Financial statement data for years ending December 31 for DePuy Company follow
Consider a retail firm with a net profit margin of 3.
Jen and Larry’s frozen yogurt venture described in Problem 3 required some
If JPJ Corp (the company from the previous question) is
Show the calculation of the following activity ratios: (1
Show All
