Financial Ratio on Assessing The ACTIVITY Of Assets Utilised
Continued from my last article, we will now look at the financial ratio for assessing the activity of assets deployed by the company. Essentially, the activity ratios measure the efficiency of managing or using of assets like
- total assets,
- accounts receivable,
- inventory, and
- accounts payable.
| Ratio | TOTAL ASSETS TURNOVER |
| Formula | Net Sales Total Assets (or average) or Accounts Receivable, Inventory |
| Use | Measure the efficiency of the usage of total assets in generating sales. |
| Values | Varies. The higher is the more effective |
| Interpretation | Comparing similar periods and similar industry statistics determines measures of efficiencies by which the assets are employed in the business. |
- Financial Ratio on Assessing The Liquidity Of A Company
- Financial Ratios On The Assessing Of The Profitability Of A Company
- Ratio Analysis: Which Ratios Have the Most Value?
- Financial Ratios on Assessing The MARKET VALUE Of A Company
- Financial Ratios on Assessing The LEVERAGE or GEARING Of A Company
- Altman Z System: Financial Ratio To Forecast Bankruptcy
- Price-Earnings-Ratio: A Useful Ratio To Understand
April 5, 2006
Posted in: Ratio Analysis

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