Assets Rotation Ratio Concept
Assets rotation ratio or indicator is an activity ratio that seeks to measure the efficiency level with which the company is using its assets. The higher the assets rotation ratio value, bigger the efficiency with which the company is creating sales.
Assets rotation ratio is calculated by the division of the total sales at a certain time by the average value of the assets in this same time period. This way, the assets rotation ratio can be interpreted as the number of times that the asset is converted in sales during a certain time period.