Asset turnover

Financial ratio representing how efficiently a company uses its assets to generate revenue

In finance, asset turnover (ATO), total asset turnover, or asset turns is a financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue or sales income to the company. Asset turnover is considered to be a profitability ratio, which is a group of financial ratios that measure how efficiently a company uses assets. Asset turnover can be furthered subdivided into fixed asset turnover, which measures a company's use of its fixed assets to generate revenue, and working capital turnover, which measures a company's use of its working capital to generate revenue. Total asset turnover ratios can be used to calculate return on equity (ROE) figures as part of DuPont analysis. As a financial and activity ratio, and as part of DuPont analysis, asset turnover is a part of company fundamental analysis.

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