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Total assets turnover

Method of calculation

Ratio's description

This ratio complements the assessment of the operating efficiency from the point of view of assets management. It informs about the ability of company's assets to produce revenues from sales. It also indicates the number of cycles during the fiscal year,  in which the total of assets is converted into revenues from sales.

Ratio's interpretation

  • The higher the ratio's value, the better the efficiency of assets management.
  • When assessing the changes in ratio's value over time (over few periods):
    • the increase of ratio's value is assessed positively (provided that it results from the increase of revenues from sales, and not the decrease of assets value),
    • the decrease of ratio's value is respectively assessed negatively.
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