Total Asset Turnover

The ratio of total sales (on your income statement) to total assets (on your balance sheet) indicates how well you're using all your business assets (rather than just inventories or fixed assets) to generate revenue.

A high asset turnover ratio means a higher return on assets, which can compensate for a low profit margin. In computing the ratio, you might compute total assets by averaging the total assets at the beginning and end of the accounting period.

Related Resources

Profitability Ratios

Fixed Asset Turnover

Be the first to comment...

You must sign in to leave a comment.

Existing Users

New Users

Your email will not be displayed on the site
Not case sensitive
This will be displayed with your comments

By registering you confirm you have read and agree to our Member Agreement. View our Privacy Policy.