Definition

Asset turnover ratio

Asset turnover ratio: Asset turnover ratio is the ratio of a company's revenue to the value of its assets. Total Asset Turnover = Net Sales / Total Assets Asset turnover ratio is generally calculated annually and tends to be higher for firms in certain sectors than in others. It is an important efficiency tool representing a company's potential to generate revenue from its assets. A higher asset turnover ratio indicates that a company is more efficient at generating revenue from its assets.