Illustrate about asset turnover - performance ratios, Strategic Management

Assignment Help:

Q. Illustrate about Asset turnover - performance ratios?

Asset turnover                                    =    Turnover /    Total assets or Capital employed

This shows how much sales are generated for every £1 of capital employed.  A low asset turnover indicates that the business is not using its assets affectively and should either try to increase its sales or dispose of some of the assets.

A company with old noncurrent assets that are almost completely depreciated will show a high asset turnover, whereas a company with recently acquired noncurrent assets will show a low asset turnover.  Different accounting policies will also give different ratios, for example using the cost model to or re-valuation model.  The age of the non-current assets is important in understanding the ratio. Recently acquired noncurrent assets will not be generating revenues to their full extent.


Related Discussions:- Illustrate about asset turnover - performance ratios

Limitations of using balanced scorecard, Q. Limitations of using balanced s...

Q. Limitations of using balanced scorecard? - Historical performance analysis is no guide to the future. - Manipulation or 'massaging' of performance measures by management,

Market demand and supply information , What kind of market demand and suppl...

What kind of market demand and supply information would be useful to you in deciding upon a business strategy?   Ans) Market Demand and Supply Information  1) Do you requ

Value marginal tradeoffs, Problem: Both person A and person B are purchasin...

Problem: Both person A and person B are purchasing bananas and apples from the same supermarket, where the price of a banana is $2 and the price of an apple is $1. Person A is curr

Describes a business model , Product flows,  information flows, service flo...

Product flows,  information flows, service flows participants' roles

Explain shared service centre model, TFX is a multinational company which m...

TFX is a multinational company which manufactures and retails branded designer clothing with business units in a number of different countries globally. Up unless now, each of the

Introduction to bread talk, Strategic management is a systematic analysis o...

Strategic management is a systematic analysis of the internal and external factors to develop strategic actions for organizational goals (Dobson & Richards, 2004). Bread Talk is a

Differences of eva and ri, Differences of EVA and RI EVA uses the r...

Differences of EVA and RI EVA uses the replacement not historical accounting cost of assets. Profit calculated under both methods are different e.g. with EVA the repla

What do you mean by controllable costs, Q. What do you mean by Controllable...

Q. What do you mean by Controllable costs? Controllable costs Divisional variable (marginal) cost. Divisional 'specific' fixed cost e.g. Specifically incurred by

Examples of staff control in the workplace, Employee behavioural controls  ...

Employee behavioural controls  'Influencing the process of how staff work and behave'. Reward e.g. based on attitude or behaviour Dress code e.g. to ensure staff u

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd