Sunday, February 17, 2008

Asset Turnover Ratio Equation

Asset Turnover Ratio is sales revenues divided by average total assets during a specified period of the sales.

It used the income statement account balance divided by the average balance of a balance sheet account.
Asset Turnover Ratio= Revenue/Total Assets

It determines the amount of sales that are generated from each dollar of assets that a company owns.
Additional Accounting Examples and Explanations:Expanded ROI formula

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