Asset Turnover definition
DEFINITION of 'Asset Turnover Ratio'. The ratio of the value of a company’s sales or revenues generated relative to the value of its assets. The Asset Turnover ratio can often be used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.Asset Turnover = Sales or Revenues / Total Assets.sset Turnover Ratio. Investopedia explains: The asset turnover ratio is a measure of a company's ability to use its assets to generate sales or revenue, and is a calculation of the amount of sales or revenue generated ... Asset Turnover Ratio. The asset turnover ratio is an efficiency ratio that measures a company's ability to generate sales from its assets by comparing net sales with average total assets. In other words, this ratio shows how efficiently a company can use its assets to generate sales.ormula. The asset turnover ratio is calculated by dividing net sales by average total assets. Net sales, found on the income statement, are used to calculate this ratio returns and refunds must be backed out of total sales to measure the truly measure the firm's assets' ability to generate sales. Asset Turnover Ratio. Investopedia explains: The asset turnover ratio is a measure of a company's ability to use its assets to generate sales or revenue, and is a calculation of the amount of sales or revenue generated ...sset Turnover Ratio. Investopedia explains: The asset turnover ratio is a measure of a company's ability to use its assets to generate sales or revenue, and is a calculation of the amount of sales or revenue generated ... What it is: The asset turnover ratio is a measure of how efficiently a company's assets generate revenue. It measures the number of dollars of revenue generated by one dollar of the company's assets.ow it works/Example: The formula for the asset turnover ratio is: Revenue / Average Total Assets. Let's look at an example using the following hypothetical information for Company ABC: Revenue is found on the income statement, and total assets are found on the balance sheet. Total Asset Turnover Ratio. Total asset turnover is a financial efficiency ratio that measures the ability of a company to use its assets to generate sales. The total asset turnover ratio is calculated by dividing the net sales by the average total assets.xample. Management uses the total asset turnover to judge how efficiently the company is using its assets to generate income. The numerator in the equation shows the income generated and the denominator shows the total assets used to generate the revenue. Asset Turnover Ratios. Asset turnover ratio is the ratio of a company's sales to its assets. It is an efficiency ratio which tells how successfully the company is using its assets to generate revenue.There are a number of variants of the ratio like total asset turnover ratio, fixed asset turnover ratio and working capital turnover ratio.sset Turnover Ratios. Asset turnover ratio is the ratio of a company's sales to its assets. It is an efficiency ratio which tells how successfully the company is using its assets to generate revenue. Asset Turnover. A ratio of a company's net sales to total assets. It is a measure of how efficiently management is using the assets at its disposal to promote sales.A high ratio indicates that the company is using its assets efficiently to increase sales, while a low ratio indicates the opposite.sset turnover measures a firm's efficiency at using its assets in generating sales or revenue; the higher the number, the better. It also reflects pricing strategy; companies with low profit margins tend to have high asset turnover, whereas those with high profit margins have low asset turnover. Total Asset Turnover Definition. The total asset turnover represents the amount of revenue generated by a company as a result of its assets on hand. This equation is a basic formula for measuring how efficiently a company is operating.otal Asset Turnover Definition. The total asset turnover represents the amount of revenue generated by a company as a result of its assets on hand. This equation is a basic formula for measuring how efficiently a company is operating. Asset Turnover. A ratio of a company's net sales to total assets. It is a measure of how efficiently management is using the assets at its disposal to promote sales.A high ratio indicates that the company is using its assets efficiently to increase sales, while a low ratio indicates the opposite. financial ratio that indicates the effectiveness with which a firm's management uses its assets to generate sales. A relatively high ratio tends to reflect intensive use of assets. Total asset turnover is calculated by dividing the firm's annual sales by its total assets. Example. Management uses the total asset turnover to judge how efficiently the company is using its assets to generate income. The numerator in the equation shows the income generated and the denominator shows the total assets used to generate the revenue.Take a manufacturing plant for example.xample. Management uses the total asset turnover to judge how efficiently the company is using its assets to generate income. The numerator in the equation shows the income generated and the denominator shows the total assets used to generate the revenue.
A ratio of a company's net sales to total assets.