Automotive Industry: OEM's

Asset Turnover Ratios (Emerging Markets), 2007-2011 60

Despite the capital expenditure cut, AUO will maintain its investments in advanced technology and higher-value products, in order to achieve higher

asset turnover ratios and to enhance the Company's long-term competitiveness.

The result could be lower

asset turnover ratios, lower return on capital, and an increase in debt-toequity ratios, which could impact borrowing capacity or compliance with loan covenants.

They hypothesize a connection between the Du Pont factors, net operating income to sales and

asset turnover ratios, and a firm's competitive strategy (cost leadership or differentiation).

H-6: The efficiency of a company as measured by inventory, debtors, and

asset turnover ratios positively influences its profitability.

Other commodity groups which do less processing--such as poultry/livestock cooperatives--have higher fixed

asset turnover ratios.

There is no evidence to suggest that restructuring improves

asset turnover ratios.

We also find that buyer firms experience a decline in the return on assets and

asset turnover ratios.

Parent and subsidiary firms not affiliated with any keiretsu groups, however, had similar

asset turnover ratios.

Circuit City has closed a number of its stores just before its fiscal year end, a practice that could overstate important performance measures such as ROA,

asset turnover ratios and same store sales.

On the other hand, the Company will continue to strengthen the strategic alliance with customers, and hope to improve the product profitability as well as

asset turnover ratios, which could eventually contribute to a better return on equity (ROE).

Ang, Cole, and Lin (2000) use

asset turnover ratios to measure agency costs and find a significant inverse relation with managerial shareholdings.