abhishreshthaa
Abhijeet S
TOTAL ASSETS TURNOVER RATIO
Total assets turnover ratio is the ratio between total assets and net sales. This ratio is expressed as a proportion.
Objectives:- The objective of this ratio is to indicate the efficiency or inefficiency in the use of total assets or resources of the concern.
Formula:-
Total Assets Turnover Ratio = Net Sales
Total Assets
Significance:-
The standard total assets turnover ratio is that the sales should be at least two times the value of the assets. This indicates that the assets of the concern have been utilized efficiently.
On the other hand turnover ratio less than 2 times indicates that the assets of the concern are under-utilized. It may be noted that a very high total assets turnover ratio indicates over-trading.
Total assets turnover ratio is the ratio between total assets and net sales. This ratio is expressed as a proportion.
Objectives:- The objective of this ratio is to indicate the efficiency or inefficiency in the use of total assets or resources of the concern.
Formula:-
Total Assets Turnover Ratio = Net Sales
Total Assets
Significance:-
The standard total assets turnover ratio is that the sales should be at least two times the value of the assets. This indicates that the assets of the concern have been utilized efficiently.
On the other hand turnover ratio less than 2 times indicates that the assets of the concern are under-utilized. It may be noted that a very high total assets turnover ratio indicates over-trading.