Asset turnover

Asset turnover is a simple ratio that shows how efficiently your business uses its assets to generate sales. It is calculated as sales (revenue) divided by average total assets for the period. A higher number means you make more sales from each dollar of assets; a very low number can signal unused or inefficient assets.

Use average assets rather than a single date, and be consistent in how you measure sales. Compare the ratio to your past results and to similar businesses, because the “good” level depends on your industry and business model.

Common variations and what they measure:

• Total asset turnover: Net sales divided by average total assets. Shows how all assets together drive sales.
• Fixed asset turnover: Net sales divided by average net fixed assets (like equipment and property). Focuses on the productivity of long‑term, operating assets.