Definition – What is Total Asset Turnover?
Total Asset Turnover is the ratio of sales to total assets.
Formula – How to calculate Total Asset Turnover
Total Asset Turnover = Sales / Total Assets
A company has sales of $12,000 and average total assets of $5,200.
Total Asset Turnover = $12,000 / $5,200 = 2.31
Therefore, this company has a total asset turnover ratio of 2.31.
Sources and more resources
- Wikipedia – Asset Turnover – Wikipedia’s short entry on asset turnover.
- Accounting Tools – Total asset turnover ratio – An introduction, formula, and sample calculation on total asset turnover.
- The Balance SMB – Your Guide to Understanding and Using the Total Asset Turnover Ratio – An introduction to total asset turnover.
- Investopedia – Asset Turnover Ratio & How is asset turnover calculated? – A measurement of a company’s assets to sales.