Home » Financial Concepts » Total Asset Turnover

Total Asset Turnover


This ratio tells you how many dollars of revenue (the value) your company gets relative to the amount invested in total assets, not just your fixed assets. This includes cash, receivables, inventory, property, plant and equipment as well as other long-term assets.


Total Asset Turnover is calculated by dividing revenue by total assets:

Total Asset Turnover Formula

For example, if a company’s revenue was $368,689,295 and its total assets was $245,193,936 then its total asset turnover is:

Total Asset Turnover Example

Book Excerpt:

(Excerpts from Financial Intelligence, Chapter 24 – Efficiency Ratios)
Total asset turnover gauges not just efficiency in the use of fixed assets, but efficiency in the use of all assets. If you can reduce inventory, total asset turnover rises. If you can cut average receivables, total asset turnover rises. If you can increase sales while holding assets constant (or increasing at a slower rate), total asset turnover rises. Any of these managing-the-balance-sheet moves improves efficiency.

Look up another Financial Concept:

A  B  C  D  E  F  G  H  I  L  M  N  O  P  Q  R  S  T  V  W 

Look up another Financial Concept:

A  B  C  D  E  F  G  H  I  J  K L  M  N  O  P  Q  R  S  TV  W  X  Y  Z

Enroll in Online Financial Training today, it's only $99

Looking for training on the income statement, balance sheet, and statement of cash flows? At some point managers need to understand the statements and how you affect the numbers. Learn more about financial ratios and how they help you understand financial statements.

Our online training provides access to the premier financial statements training taught by Joe Knight. Learn finance in a fun and clear way that’s easy and painless.