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What Is Asset Turnover?

By Adam LevyUpdated Feb 25, 2025 at 10:47 PM

Key Points

  • Asset turnover ratio calculates efficiency of asset use to generate sales; formula: Total Sales ÷ Average Assets.
  • Higher asset turnover indicates better capital use and operational efficiency relative to competitors.
  • Comparison within industry essential due to variations in acceptable turnover ratios across sectors.

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