![]() ![]() To simply put it, this ratio shows how efficiently a company can use its assets to generate sales. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest. The asset turnover ratio is an efficiency ratio that measures and helps analyse a company’s ability to generate sales from its assets by comparing net sales with average total assets. A higher ratio implies that management is using its fixed assets more effectively. There are no guarantees that working with an adviser will yield positive returns. The fixed asset turnover ratio is calculated by dividing net sales by the average balance in fixed assets. Related: Revenue Vs Turnover: Meaning, Key Differences And Examples. Asset turnover ratio Net sales / Average asset value. The resulting number is the asset turnover ratio. Divide the net sales by the average asset value. Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). Total Asset Turnover Ratio Net Sales Average Total Assets Average Total Assets (Beginning Total Assets + Ending Total Assets) 2 While the income statement measures a metric across two periods, balance sheet items reflect values at a certain point of time. The asset turnover ratio compares the net sales to the average asset value. All investing involves risk, including loss of principal. This is not an offer to buy or sell any security or interest. We do not manage client funds or hold custody of assets, we help users connect with relevant financial advisors. ![]() SmartAsset does not review the ongoing performance of any RIA/IAR, participate in the management of any user’s account by an RIA/IAR or provide advice regarding specific investments. SmartAsset’s services are limited to referring users to third party registered investment advisers and/or investment adviser representatives (“RIA/IARs”) that have elected to participate in our matching platform based on information gathered from users through our online questionnaire. Securities and Exchange Commission as an investment adviser. ![]() SmartAsset Advisors, LLC ("SmartAsset"), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. ![]()
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