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

CLEARANCE LETTER is a documented certification from a recognized authority that the cleared entity has satisfied certain requirements, payments, actions, etc.

ORDERLY LIQUIDATION VALUE is the liquidation value at which the asset or assets are sold over a reasonable period of time to maximize proceeds received.

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