How To Calculate

Learn how to calculate anything
Menu
  • bmi
Home
rate
How to Calculate Asset Turnover Ratio.
rate

How to Calculate Asset Turnover Ratio.

Rosemary Njeri

The asset turnover ratio measures the efficiency of a company’s assets to generate revenue or sales.

The higher the asset turnover ratio the better. But whether a particular ratio is good or bad depends on the industry in which your company operates.

Formula to calculate the asset turnover ratio.

Calculate Asset Turnover Ratio.

Net sales are the amount of revenue generated after deducting sales returns, sale discount and sales allowances.

Average total assets is the average of the assets at the beginning of the year and the assets at the end of the year.

Example:

A firm’s total average assets in a certain financial year was $500,000. The value of the net sales in that same year was $300,000. Determine the firm’s asset turnover ratio.

Calculate Asset Turnover Ratio.

Thus, the asset turnover ratio is 0.6.

Share
Tweet
Reddit
Pinterest
Email
Prev Article
Next Article

Related Articles

How to Calculate Average Tax Rate.
Average tax rate or effective tax rate is the share …

How to Calculate Average Tax Rate.

How to Calculate CD Interest.
CD is short for certificate of deposit. A certificate of …

How to Calculate CD Interest.

Leave a Reply Cancel Reply

Popular Posts

  • 5 Best AI Apps for Solving Complex …
    March 22, 2023 0

Categories

learntocalculate.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.

How To Calculate

Learn how to calculate anything

Pages

  • About Us
  • Contact Us
  • Privacy Policy
Copyright © 2023 How To Calculate

Ad Blocker Detected

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker.

Refresh