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

Future organisation strategy, The company is now aggressively working towar...

The company is now aggressively working towards being the largest retail chain in the country and also being first in profitability.  At the same time the company is exploring maki

Decision-making about production and operations stp, You are the newly-appo...

You are the newly-appointed Marketing Director of a multinational company operating in the national and regional plantation industry. In order to achieve a 100% business growth com

Make a list of business goals, Harriet's Fruit and Chocolate Company was es...

Harriet's Fruit and Chocolate Company was established in 1935 in the Pacific Northwest of the United States to ship gift baskets of locally grown peaches and pears to customers in

Explain operating profit margin - performance ratios, Q. Explain Operating ...

Q. Explain Operating profit margin - performance ratios? Operating profit mar =              (PBIT / Turnover) x 100% This is the ratio of operating profit to sales or turno

Describe about interest cover, Q. Describe about Interest cover? Intere...

Q. Describe about Interest cover? Interest cover =   (Profit before interest and tax (PBIT)/ Interest payable)            (no. of times) Interest cover shows the safety of e

Strategic information management, TASK 1 What are the key system appli...

TASK 1 What are the key system applications in a business? What role Data/Information plays to support the management decision making. Examine the criteria to be applied when

Discuss the strategic management models, VRC is a family owned business whi...

VRC is a family owned business which has been manufacturing racing cycles for over a century. Over the years, the company has been relatively successful, although its growth has te

How market has influenced the forms and content of the media, 1. The develo...

1. The development of the mass media has been shaped in fundamental ways by the fact that they have often been profit-driven. The commercial or capitalist context of media is evide

A strategic vision is differ from a mission statement, A Strategic Vision i...

A Strategic Vision is Differ from a Mission Statement: Whereas the chief concern of a strategic vision is with "where we are going & why", a company's mission statement usua

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