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Learn what asset turnover ratio is, the formula, how to calculate it and how it measures a company's efficiency in generating revenue from its assets.
X 1 = working capital / total assets X 2 = retained earnings / total assets X 3 = earnings before interest and taxes / total assets X 4 = market value of equity / total liabilities X 5 = sales / total assets. Z-score bankruptcy model: Z = 1.2X 1 + 1.4X 2 + 3.3X 3 + 0.6X 4 + 1X 5. Zones of discrimination: Z > 2.99 – "safe" zone 1.81 < Z < 2.99 ...
Asset turnover is considered to be a profitability ratio, which is a group of financial ratios that measure how efficiently a company uses assets. [2] Asset turnover can be furthered subdivided into fixed asset turnover, which measures a company's use of its fixed assets to generate revenue, [3] and working capital turnover, which measures a ...
Accounts Receivable / Total Annual Sales × 365 Days Average payment period [4] Accounts Payable / Annual Credit Purchases × 365 Days Asset turnover [21] Net Sales / Total Assets Stock turnover ratio [22] [23] Cost of Goods Sold / Average Inventory Receivables Turnover Ratio [24] Net Credit Sales / Average ...
In 2023, Coca-Cola generated $45.754 billion in revenue and reported $10.905 billion in fixed assets. This gives the company a fixed asset turnover ratio of 4.2x for the year. This shows that Coca ...
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The company's asset turnover (ATO) is (Revenue ÷ Average Total Assets). The company's equity multiplier is (Average Total Assets ÷ Average Total Equity). This is a measure of financial leverage.
A declining ratio may indicate that the business is over-invested in plant, equipment, or other fixed assets. In A.A.T. assessments this financial measure is calculated in two different ways. 1. Total Asset Turnover Ratio = Revenue / Total Assets 2. Net Asset Turnover Ratio = Revenue / (Total Assets - Current Liabilities)