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

How you can recognizing a company’s strategy, Recognizing a Company's Strat...

Recognizing a Company's Strategy 1.   A company's strategy is reproduced in its actions in the marketplace & the statements of senior managers regarding the company's current b

Animal processing, what is HACCP and benefits in food industry

what is HACCP and benefits in food industry

Analyzes gender difference in communication organization, 1.Tannen analyzes...

1.Tannen analyzes gender differences in communication within organizations. Does her analysis resonate in your experience? Have gender-specific differences in communication become

Management strategic planning, You are an asset manager for a large public ...

You are an asset manager for a large public utility organisation. The organisation has a range of assets, ranging from major distributors to minor assets directly serving users (fo

Describe a differentiation strategy, The provision of services or products...

The provision of services or products that offer advantages different from those of competitors and that are widely valued by purchasers.

Product and pricing strategy, Product and Pricing strategy.   This a...

Product and Pricing strategy.   This activity is part of your marketing plan. Prepare a 4-5 page report, addressing the following: Explain the rationale for the compo

Strategic position analysis, The assignment for the module is an individual...

The assignment for the module is an individual report which contributes 25% of the module total mark. You should conduct a Strategic Position Analysis (Situation Analysis) on an or

expectation of stakeholders , 1.1 Describe the importance of external fact...

1.1 Describe the importance of external factors affecting an organization. 1.2 Examine the requires and expectation of stakeholders of an organization. 1.3 Examine the main chang

Benefits of using balanced scorecard, Benefits of using balanced scorecard ...

Benefits of using balanced scorecard (BSC) - BSC encourages a long-term view of improving performance through time. - BSC considers both non-financial as well as financial m

Business and corporate level strategy, Business-Level Strategy From the...

Business-Level Strategy From the outset, you were required to focus on the strategic business unit (SBU) to ensure that Business-level strategies could be applied. The challeng

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