Asset Turnover Ratio Calculator

How it is calculated

Asset turnover = revenue / assets. Revenue is the sales for the period (usually a year) and assets is the total assets figure you type in. The tool does not average anything itself: for the textbook ratio, enter the average of opening and closing total assets, (opening + closing) / 2.

The result is shown with two decimals as a plain ratio and as dollars of revenue per dollar of assets. Revenue may be zero but not negative, and assets must be above zero; otherwise nothing is shown. Both figures must be in the same currency and cover the same period. What counts as a good ratio depends on the industry.

Common mistakes

• Using year-end assets for a fast-growing company instead of the average: assets that jumped late in the year make the ratio look worse than the year's operations were.
• Mixing periods, such as quarterly revenue with annual assets: the ratio then comes out about four times too small.
• Using profit instead of revenue: the numerator must be sales, so entering net income gives a profit-to-assets figure, which is a different ratio (return on assets).
• Comparing a retailer's turnover with a utility's: capital-heavy businesses are naturally low, so only same-industry comparisons mean much.