What is Asset Turnover?

Asset Turnover is a metric that investors and companies can use to determine how efficiently a business uses its assets to create revenue.

Asset Turnover is a ratio of the value of a company’s sales or revenues relative to the value of its assets. It can be calculated simply by dividing sales or revenue by total assets.

The higher an asset turnover ratio for a company, the better that company is performing - since it implies that the company is generating a high level of sales and revenue per unit of assets.

What are Net Sales?
What is Receivables Turnover Ratio?