Total Asset Turnover Ratio

Total asset turnover is a ratio which indicates a company’s sales in relation to its assets. This ratio is found by dividing the company’s net sales by its average total assets.

Example:

A candy factory makes 10 million Swiss francs worth of net sales in a business year. Its average total assets in the same year come to 20 million francs. So its total asset turnover ratio for that year is .50, meaning that net sales accounted for 50 centimes of each 1 franc of assets held.

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