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157:. It is calculated by adding up the assets at the beginning of the period and the assets at the end of the period, then dividing that number by two. This method can produce unreliable results for businesses that experience significant intra-year fluctuations. For such businesses, it is advisable to use some other formula for Average Total Assets.
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tend to have high asset turnover, while those with high profit margins have low asset turnover. Companies in the
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133:{\displaystyle {\text{ATO}}={\frac {\text{Net Sales Revenue}}{\text{Average Total Assets}}}}
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tend to have a very high turnover ratio, due mainly to cutthroat and competitive pricing.
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Financial ratio representing how efficiently a company uses its assets to generate revenue
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Drake, P. P., Financial ratio analysis, p. 8, published on 15 December 2012
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or sales income to the company. Asset turnover is considered to be a
143:"Sales" is the value of "Net Sales" or "Sales" from the company's
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Alternatively, "Average Total Assets" can be ending total assets.
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that measures the efficiency of a company's use of its
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180:Bodie, Zane; Alex Kane; Alan J. Marcus (2004).
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289:Henry, Elaine; Robinson, Thomas R. (2019).
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271:. CFA Institute. pp. 314–316
212:. CFA Institute. pp. 293–294
182:Essentials of Investments, 5th ed
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167:References
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