asset turnover ratio

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Indicates how successful a firm is in utilizing its assets in generation of sales revenue. A high ratio is considered desirable, but what is considered high in one industry may be low for another. Asset turnover ratios are computed for specific assets, such as 'cash to sales' (cash ÷ sales revenue), 'inventory to sales' (value of inventory ÷ sales revenue), 'fixed assets to sales' (fixed assets ÷ sales revenue). When computed as total 'assets-to-sales' ratio (total assets ÷ sales revenue), it is called capital intensity.

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We had a very successful asset turnover ratio and that gave us a lot of confidence for what we were doing in the future.
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You need to understand the best way to use an asset turnover ratio to the long term advantage of your business.
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The asset turnover ratio of selling bottled water was greatly superior to the asset turnover ratio involved in selling GPS devices since so much money needed to be allocated to research and development.
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