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Tuesday, June 14, 2011

Sales to Total Assets Ratio Analysis

Definition: Sales to Total Assets ratio indicates how efficiently the firm generates sales revenue on each dollar of assets. It is defined as the total assets divided by the turnover of the firm.

Formula:
Sales to Total Assets = Sales / Total Assets

Example:
BCD Company has the following information:
Total sales $500,000
Sales returns $20,000
Fixed Assets (Net book value) $180,000
Cash $30,000

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