ASSET TURNOVER RATIO Definition

ASSET TURNOVER RATIO is a general measure of a firms ability to generate sales in relation to total assets. It should be used only to compare firms within specific industry groups and in conjunction with other operating ratios to determine the effective employment of assets. Formula: REVENUE/ASSETS.

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AAA-CPA is American Association of Attorney-Certified Public Accountants.

SIGNIFICANCE is a meaning that is not expressly stated but can be inferred, e.g. the significance of an increase in product demand can only be known after the financial effects are calculated.

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