How do I calculate the total asset turnover?
The Total Asset Turnover ratio is an important measure of a company's efficiency. To calculate it, The formula is:
Total Asset Turnover = Total Sales / Total Assets. This ratio gives a sense of how much revenue each dollar of assets is generating. For example, if a company's Net Sales are $100 and its Average Total Assets are $50, then its Total Asset Turnover ratio would be 2.0. This means that the company is generating $2.00 in revenue for every dollar of assets. It is important to note that the Total Asset Turnover ratio can vary greatly by industry, so it is important to compare a company's ratio to others in its industry to get an accurate assessment of performance. Software tools such as Sourcetable can be used to calculate the Total Asset Turnover ratio.