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What is Asset Turnover Ratio
Asset Turnover Ratio is a term that indicates the efficiency of utilization of total assets. Asset turnover indicates how many times the total assets turnover for one year.

Asset Turnover Ratio is a term that indicates the efficiency of utilization of total assets. Asset turnover indicates how many times the total assets turnover for one year.

Asset turnover should be at least at the level of 1.

Calculation:

Asset Turnover = Sales / Total assets

For the denominator it should be used the average of assets at the end and beginning of the year (if the information is available).

Use of the Asset Turnover Ratio in practice: In the enterprise it used by CFO in financial analysis to analyze ratios. For the objectivity it is suitable the industry comparison.

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Last update: 18.02.2016

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