What is the asset turnover ratio if the net sales are 51195 and the average total assets is 135128?

Answer 1

Asset Turnover = Net Sales/Average Total Assets

Asset Turnover = 51195/134128

Asset Turnover = 0.38169 It depends on the industry, but generally a number this low indicates that the company has too much money tied up in assets that are not contributing to sales. It's a ratio of sales/total assets (or total average assents). Profit margins are an important consideration when analysing this number.