accounting definition total asset turnover
total asset turnover. A financial ratio that indicates the effectiveness with which a firm's management uses its assets to generate sales. A relatively high ratio tends to reflect intensive use of assets. Total asset turnover is calculated by dividing the firm's annual sales by its total assets.
What is 'Asset Turnover Ratio'. Asset turnover ratio is the ratio of the value of a companyâs sales or revenues generated relative to the value of its assets. The Asset Turnover ratio can often be used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.