Investor Glossary-asset turnoverInvestor Glossary-asset turnoverInvestor Glossary-asset turnoverInvestor Glossary-asset turnoverInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Asset Turnover

The HTML to link to this page
 

Asset turnover is an efficiency ratio used in financial analysis that shows the sales or revenue volume produced for ever dollar of assets owned. Asset turnover is sales divided by assets, and asset turnover is correctly expressed both as a percentage or as x times. For example, if Tractorco has $40 million of assets and $100 million of sales then its asset turnover is 250% or 2.5x. If Tractorco grows to $280 million of sales with the same assets, its asset turnover is 700% or 7.0x and its efficiency in use of assets has increased by 180%. Asset turnover ratios vary considerably by industry, and high asset turnover may indicate a type of business with low margins. An important investment efficiency and fundamental analysis measure, asset turnover is one way to analyze if a growth company's supporting asset base is keeping pace with its sales. Asset turnover is often applied in alongside inventory turnover and days-to-sales ratios to provide more strategy information about productive efficiency.



Rate this asset turnover definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: labor relations, in escrow, command economy, class C shares, ex-dividend date, limit order, balance sheet, LIBOR, implied volatility, required rate of return, stock market close, APR, margin rate, Zero Cost Collar, phantom income, 1035 exchange, retained earnings, inflation, diluted share, VIX, real GDP, annual return, current ratio, dividends payable, risk management, quality assurance, FTSE, EBITDA, irrevocable trust, deferred revenue, stock split, deferred tax, FICO score, reverse mortgage, option premium, wholly-owned subsidiary, average price per share, debt service coverage, 1031 exchange, cancelled check, minority interest, liquidity ratio, 401a, 144a, covered put, Key Rate Duration, ex-dividend, open position, per diem


Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
Investor Glossary Index >>> # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
©2004-2014 Investor Glossary - All rights reserved - Terms of Use