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Assets Rotation Ratio Concept
Assets rotation ratio or indicator is an
activity ratio that seeks to measure the efficiency level with which the
company is using its assets. The higher the assets rotation ratio value,
bigger the efficiency with which the company is creating sales.
Assets rotation ratio is calculated by the
division of the total sales at a certain time by the average value of
the assets in this same time period. This way, the assets rotation ratio
can be interpreted as the number of times that the asset is converted in
sales during a certain time period.
Translated from Portuguese
by Susana Saraiva, Portuguese-English and English-Portuguese translation
specialist. Contact: spams@sapo.pt.
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