Asset Turnover Ratio is calculated as the total revenue of a company divided by average total assets over the past 2 financial years.
The asset turnover ratio measures the value of a company’s sales or revenues relative to the value of its assets.
This metric helps investors understand how effectively companies are using their assets to generate sales. The higher the asset turnover ratio, the more efficient a company is at generating revenue from its assets. Conversely, if a company has a low asset turnover ratio, it indicates it is not efficiently using its assets to generate sales.