Rate of asset turnover

In the context of retail management it is one of the measures of assessing the profitability of a retail establishment. It is computed by dividing the retailer’s net sales by total assets. This ratio measures how productively the retailer’s assets are being utilized. The asset turnover ratio incorporates data from the income statement (sales) and the balance sheet (assets) and, as such shows how well the retailer is utilizing its capital to generate sales. This ratio may also be used by manufacturing companies.