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Monday, May 23, 2011

Total Assets Turnover Ratio Analysis

Definition: Total Assets Turnover Ratio (TATR) is used to measure the firm's ability to utilize its assets to generate sales. It is an indication to the firm's operation efficiency. A lower ratio means inefficient utilization of assets.

Formula:
Total Assets Turnover Ratio = Net Sales / Total Assets
Or,
TATR = Net Sales / Average Total Net Assets

Example 1:
APP Ltd has the following information

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