Wha is asset turnover- performance ratios, Financial Management

Assignment Help:

Wha is Asset turnover- performance ratios

Asset turnover = Turnover/ Total assets or capital employed

This demonstrates how much sales are generated for every £1 of capital employed. A low asset turnover indicates that business isn't using its assets affectively and must either try to increase its sales or dispose of some of the assets.

A company with old noncurrent assets which are almost completely depreciated will demonstrate a high asset turnover whilst a company with recently acquired noncurrent assets will represent a low asset turnover.

Different accounting policies will also generate different ratios, for illustration using the cost model to or revaluation model. The age of the non-current assets is vital in understanding the ratio. Recently acquired noncurrent assets won't be generating revenues to their full extent.

 


Related Discussions:- Wha is asset turnover- performance ratios

Explain the adjusting journal entry, Q. Explain the Adjusting Journal Entry...

Q. Explain the Adjusting Journal Entry? Adjusting Journal Entry - An accounting entry made into a subsidiary ledger known as the Generaljournal to account for a periods changes

Describe modigliani and miller approach of capital structure, Q. Describe M...

Q. Describe Modigliani and Miller Approach of Capital Structure? Ans. Modigliani as well Miller Approach: - The Modigliani-Miller approach is alike to the net operating income

Brief introduction of asset backed security, An asset-backed security is a ...

An asset-backed security is a type of bond or note that is based on a pool of assets, or collateralized by the cash flows from a specified pool of underlying assets. As

Deterministic model, Deterministic Model After the macroeconomic, indus...

Deterministic Model After the macroeconomic, industrial and business analysis of the company chosen is done First of all a point estimate for all the input variables in a valua

Convexity measure , We can measure the convexity with the help of following...

We can measure the convexity with the help of following formula:                                                                              ...Eq. (4) Where,          Δ

Globalization of financial markets, Floria Scarpia believes that many of he...

Floria Scarpia believes that many of her clients could benefits from using international investments to diversify their portfolios but many are reluctant to invest abroad -especial

Parties to mutual fund trust, Parties to Mutual Fund Trust As is common...

Parties to Mutual Fund Trust As is common to any trust covered under the Indian Trust Act, the parties involved in a mutual fund trust are the sponsor or settler, the trustees,

Calculation of weighted average cost of capital, Calculation of Weighted Av...

Calculation of Weighted Average Cost of Capital The calculation of weighted cost of capital involves the following steps: (i) Calculate the cost of each source of funds.

Enumerate the securities and investment analysis, Enumerate the Securities ...

Enumerate the Securities and Investment Analysis Purchase of bonds, stocks and othersecurities involve analysis and techniques which are highly specialized. An investorshoul

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd