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

Calculate capacity of the system, Cookie company is open for all day and ni...

Cookie company is open for all day and night, 24 hrs. Enough demand exists to keepthe cookie company busy 24 hrs. Assume you have: (i) One oven which can accommodate one tray

Sm0492 - strategy and change in the global environment, 1. Using Macro & M...

1. Using Macro & Micro frameworks analyse and evaluate the external environment of your organisation from the perspective of the external context within which it operates. Summar

Investigation of potential solutions, Investigation of potential solutions ...

Investigation of potential solutions The investigation of potential software solutions must involve what is common practice in the industry. Consider the following questions:

Explain about hopwood’s self-control, Q. Explain about hopwood’s Self-contr...

Q. Explain about hopwood’s Self-control? Self-regulation e.g. members of staff or managers exerting self-control by the modification of their own behaviour.  This is essence de

How strategy is partly proactive and it is partly reactive, Strategy Is Par...

Strategy Is Partly Proactive and It Is Partly Reactive 1. A company's strategy is usually a blend of (I) proactive actions on the part of mana­gers to increase the company's ma

How might a company sustain and win a price war, ? A) By including a lower ...

? A) By including a lower cost structure ? B) By cross-subsidizing one business from another ? C) By including "deeper pockets" to fund short to medium term losses

Open group architecture framework, Discuss the following quotation and ...

Discuss the following quotation and please provide examples. Enterprise Architecture is an organising logic for managing change within an Information Systems environ

Lienear programming , A paper mill produces two grades of paper viz., X and...

A paper mill produces two grades of paper viz., X and Y. Because of raw material restrictions, it cannot produce more than 400 tons of grade X paper and 300 tons of grade Y paper

Show the merits of using return on investment, Q. Show the Merits of using ...

Q. Show the Merits of using return on investment? Merits of using return on investment (ROI) -  Relative (percentage) measure so performance can be compared 'relatively' f

Behaviour of divisional senior executives, Q. Behaviour of divisional senio...

Q. Behaviour of divisional senior executives? EVA can affect the behaviour of divisional senior executives in the following ways. 1.  They would concentrate their investment

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