Asset turnover
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. It is also known as total asset turnover.
| asset turnover See total asset turnover. |
Asset Turnover
What Does Asset Turnover Mean?
The amount of sales generated for everydollar's worth of assets; it is calculated by dividing sales in dollars by assets in dollars:
Investopedia explains Asset Turnover
Asset 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.
Related Terms:
• Fundamental Analysis
• Inventory Turnover
• Net Sales
• Revenue
• Turnover
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