5.4 Asset Turnover Ratios Asset Turnover Ratio are basically productivity ratios which measure the output produced from the given input deployed. This relationship is shown as under Productivity =
Output Input
Assets are inputs which are deployed to generate production (or sales). The same set of assets when used intensively produces more output or sales. If the asset turnover is high, it shows efficient or productive use of input. The following Assets Turnover Ratios are calculated for the company. •
Total Assets Turnover
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Net Fixed Assets Turnover
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Net Working Capital Turnover
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Inventory Turnover Ratio
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Debtor Turnover (in times)