Asset Turnover

The amount of sales generated for every dollar's worth of assets. It is calculated by dividing sales in dollars by assets in dollars.

Formula:



Asset turnover measures the firm's efficiency at using its assets in generating sales or revenue; the higher the number the better. It also indicates pricing strategy: companies with low profit margins tend to have high asset turnover; those with high profit margins have low asset turnover.



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Related Terms

Asset

Du Pont Identity

Fundamental Analysis

Inventory Turnover

Net Sales

Revenue

Turnover

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