Total Asset Turnover Ratio
factor.formula
Average Total Assets =
This indicator measures the efficiency of asset utilization by comparing a company's operating income with its total asset size.
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The rolling total operating income for the most recent 12 months reflects the business scale and sales capacity of the company over the past year.
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The average of the total assets at the beginning of the period and the total assets at the end of the period is calculated to represent the average asset size of the enterprise during the observation period and is used to match it with operating income.
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Total assets at the beginning of the observation period.
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Total assets at the end of the observation period.
factor.explanation
The higher the total asset turnover rate, the more efficient the company is in generating revenue using existing assets. Conversely, a lower turnover rate may indicate that the company's asset utilization efficiency is low, with too many idle or inefficient assets. It should be noted that the reasonable level of this indicator will vary depending on the characteristics of the industry, so when analyzing, it is necessary to conduct a comprehensive assessment based on the industry average and the company's historical performance. This indicator can be used to compare the asset operating efficiency of different companies in the same industry horizontally, or to analyze the changes in operating efficiency of the same company in different periods vertically, thereby assisting investment decisions.