What is asset turnover ratio?

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. Asset turnover is the ratio of total sales or revenue to average assets.

What is capital turnover?

Expressed as a formula, capital turnover is the ratio between a company’s net sales and the average shareholders’ equity across a specified period. Net Sales: The net sales of a company is the starting line item on the income statement that represents the total monetary value earned from the sale of goods and services in a specified period.

What is total asset turnover (ATO)?

Asset turnover ( ATO ), total asset turnover, or asset turns is a financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue or sales income to the company.