Total Asset Turnover

Total asset turnover

The ratio of net sales to total assets.

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total asset turnover

A 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. Sales are listed on the firm's income statement and assets are listed on its balance sheet. Also called asset turnover.

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Total 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 simply as asset turnover.