Fixed asset turnover ratio high or low8/28/2023 ![]() This can conclude that XYZ Company could be more efficient with its use of assets. This means that for every rupee in assets, the company only generates an income of 16 paise. So the total asset turnover ratio of XYZ Company is: The following are the details found in the company’s financial statements. The investor wants to know how well the company uses its assets to produce sales. Let’s quickly understand the asset turnover ratio with an example.Īssume XYZ Company is a car manufacturing company currently looking for new investors and has a meeting with an angel investor. Remember, different industries can have different asset turnover ratio values. The asset turnover ratio formula is as below –Īsset turnover ratio = Net sales/Average total assets This ratio is fairly simple to calculate. It is paramount to compare this ratio only to companies in the same sector or industry.įormula, example and calculation of the asset turnover ratio. ![]()
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