Asset Turnover

It is a ratio which is used for measuring the value of a corporation’s sales/ revenues relative to the value of its assets. The ration can be used to highlight as to how a company is utilizing its assets to generate income.

If the ratio is on the higher side then it means that the company is efficient in utilizing its assets to generate income. If the ratio is on the lower side then it indicates that the company is not efficiently utilizing its assets to generate income.