What is a Total Asset Turnover?
” The total asset turnover is a means of determining the relationship between the total assets of a company and the net sales produced with those assets. Essentially, the point of a total asset turnover is to make sure that the company is realizing an equitable return on the investment made in the sales effort using company assets. Periodic calculation of the total asset turnover can help a company identify processes and procedures that can be refined and help to increase the return. . The formula for calculating a total asset turnover is relatively simple. The first step is to identify the net sales occurring during the period under consideration.
The total asset turnover is a means of determining the relationship between the total assets of a company and the net sales produced with those assets. Essentially, the point of a total asset turnover is to make sure that the company is realizing an equitable return on the investment made in the sales effort using company assets. Periodic calculation of the total asset turnover can help a company identify processes and procedures that can be refined and help to increase the return. The formula for calculating a total asset turnover is relatively simple. The first step is to identify the net sales occurring during the period under consideration. Next, the value of the average total assets held during the same period is determined. The total of the net sales is divided by the average total assets, providing a simple snapshot of the level of actual return that resulted from the use of the assets. Going through the exercise of determining the total asset turnover for a given period is usef
