TOTAL ASSET TURNOVER Definition

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.

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HORIZONTAL FINANCIAL ANALYSIS allows comparison of one companys ratios to the ratios of other companies as well as to average industrial ratios and internal industrial deviation of these ratios.

TAN is Tax Anticipation Note.

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