The
asset turnover ratio is an expansion on the
idea of efficient use of capital. It expands
this principle to include all assets. There
are several important limitations to this
ratio as it is influenced by depreciating
assets and when used as a management performance
indicator can be misrepresented by the use
of older assets. Because of this significant
limitation, asset turnover ratio should be
used only with similar related measurements.
To
calculate asset turnover ratio:
Asset
turnover = Net sales revenue / average total
assets
Historical and current end-of-day data provided by Interactive Data Corp. and subject to terms of use. Fundamental data supplier: Mergent
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