Asset turnover is one of the three DuPont components of ROE. Retailers have high turnover (often 2+); utilities and real estate firms have low turnover (below 0.5).
How to use the Total Asset Turnover Calculator
- Net sales
- Total assets (beginning)
- Total assets (end)
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter net sales and beginning and ending total assets.
Inputs explained
| Field | What to enter |
|---|---|
| Net sales | Amount in your currency |
| Total assets (beginning) | Amount in your currency |
| Total assets (end) | Amount in your currency |
What each result means
- Total asset turnover = [Net sales]÷(([Total assets (beginning)] + [Total assets (end)])÷2)
- Average total assets = ([Total assets (beginning)] + [Total assets (end)])÷2
Example values
How the main result changes when Net sales changes and everything else stays at the example values above:
| Net sales | Total asset turnover |
|---|---|
| 2,000,000 | 0.67 |
| 3,000,000 | 1 |
| 4,000,000 | 1.33 |
| 5,000,000 | 1.67 |
| 6,000,000 | 2 |
| 8,000,000 | 2.67 |
Formula
Total asset turnover = net sales ÷ average total assets
Average total assets = (beginning + ending) ÷ 2
Worked example
Inputs: Net sales: $4,000,000; Total assets – beginning: $2,800,000; Total assets – end: $3,200,000.
Results: Total asset turnover = 1.33; Average total assets = $3,000,000.00.
Frequently asked questions
What is a good asset turnover ratio?
It varies: around 1 is common; retailers are higher.
How can asset turnover be improved?
Increase sales or reduce idle assets.
How does it relate to ROE?
ROE = net margin × asset turnover × equity multiplier.