According to the given model, the key ROE determinants are sales revenues (profit rate), asset turnover ratio
and financial leverage.
This score, from 0 to 9, is based on criteria which determine the soundness (or lack thereof) of stocks, which include: positive return on assets and operating cash flow this year; higher return on assets (ROA); gross margin and asset turnover ratio
this year versus last; operating cash flow greater than ROA; lower ratio of long term-debt and higher current ratio this year than last; and no new shares issued this year.
Fixed asset turnover ratio
measures sales generated by the company out of investment made in fixed assets.
He will also promote investment opportunities in the EGX, focusing on the market's strong asset turnover ratio
and the recent reforms to the its regulatory structure which have earned the World Bank highest qualification for disclosure and protection of shareholders' equity in the OECD area.
The most important activity ratios include asset turnover ratio
and inventory turnover ratio (Veronica & Anantadjay, 2014).
In sectors such as power and telecommunication, which are more asset-heavy, the asset turnover ratio
is low, while in sectors such as retail, it is high (as the asset base is small).
A high asset turnover ratio
is desirable because it is indicative of better operating performance.
3 Receivables turnover ratio index X 2 Inventory turnover ratio Current asset turnover ratio
Fixed asset turnover ratio
Total asset turnover ratio
The present study aims to investigate relationship between the financing patterns of business units (age of companies, company size, growth in retained earnings, growth in long-term and short-term debt development) and financial performance indicators (return on assets, return on equity, the ratio of net profit to sales , asset turnover ratio
, cash flow, ratio of debt to assets, ratio of long-term debt to equity ratio) so that explain effects of capital structure on the performance of it structure.
However, during the same period the overall trend of asset utilization ratios have remained flat as compared to last year except for fixed asset turnover ratio
which has increased on account of increase in turnover as less capitalization of property plant and equipment as compared to last year.
Asset turnover ratio
= Sales/Total assets (Vance 2002: 23).
Additionally, the Ratio of Net Income to Net Sales (RETURNS), which reflects profitability, did not differ significantly, but was reduced after the listing, and the Total Asset Turnover Ratio
(TURNOVER), which reflects activity, was also significantly reduced after the listing as compared to before the listing.