Asset Turnover Ratio
the asset turnover ratio is a measure of a company's ability to use its assets to generate sales or revenue, and is a calculation of the amount of sales or revenue generated per dollar of assets. the formula for the ratio is as follows. sales or revenues divided by total assets. a higher number is preferable, since it suggests that the company is using its assets efficiently to make money. a lower number may convince a company to try other methods to help maximize the efficiency of its assets. nevertheless, this ratio varies between industries and can only be compared effectively between businesses in the same sector. asset turnover is usually calculated annually either for the fiscal or calender year. the total assets may also be the calculated average of assets at the beginning and end of the year. for example, x-eyes mart has an asset base of $400,000,000 at the beginning of its fiscal year. the company sees its asset base increase to $500,000,000 by its fiscal year end, which means that it had an average of $450,000,000 in assets for the fiscal year. during that same fiscal year, the company generated $250,000,000 in revenues. thus, the asset turnover ratio is $250,000,000 divided by $400,000,000 equals 0.56. since x-eyes mart is a big box retailer that sells closing and household goods, its asset turnover of 0.56 is below the retail industry standard. asset turnover ratios should be higher for companies in consumer staples sectors, since these businesses tend to have small asset bases but a high volume of sales due to comparative pricing. for comparison's sake, the retail giant wal-mart had an asset turnover of 2.37 in 2012. as a result, x-eyes mart's ceo ? decides to restructure the company in order to improve efficiency.
- asset turnover ratio・・・総資産回転率→https://ja.wikipedia.org/wiki/%E7%B7%8F%E8%B3%87%E6%9C%AC%E5%9B%9E%E8%BB%A2%E7%8E%87
- big box retailer・・・大規模小売店
- consumer staples・・・生活必需品