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Asset Turnover Ratio

The asset turnover ratio is a profitability ratio that measures how efficient a company is at generating sales from its assets.



Image illustrating Asset Turnover Ratio



Interpreting the Ratio

  • Measures how many sales dollars are earned for every $1 of total assets.
  • High ratio means the company is efficient at using its assets to generate sales.


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Example: Asset Turnover

Compute the asset turnover ratio for 2020


Image illustrating Example





Image illustrating Example





Practice: Asset Turnover

Compute the asset turnover for the year 2020. Do not round your work, round your final answer to 4 decimal places and enter you answer in decimal form.



Illustration for practice question: Practice: Asset Turnover






Illustration for practice question: Practice: Asset Turnover


Asset turnover ratio

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