TOTAL ASSET TURNOVER Definition

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TOTAL ASSET TURNOVER measures managements efficiency in managing all of a firm's assets - specifically the generation of revenues from the firms total investments in assets. This ratio is extremely important in high asset firms such as manufactures and telecommunications companies. Generally, the higher this ratio as compared to like companies or the industry (Formula: Net Revenue / Total Assets):

  •  the smaller the investment required to generate sales, thus the more profitable the firm.
  •  indicates the firm has less money tied up in fixed assets for each dollar of sales revenue.

Learn new Accounting Terms

MEAN is the measure of central tendency; also called the average. It is calculated by the sum of the data points divided by the number of data points.

LOC see Letter of Credit.

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