Asset turn over net assets

Alaa

Hi ,
I am abit confused with the asset turnover net assets formula . In both Kaplan and Osborne the formula is revenue / total assets -current liabilities . As far as I know net assets = total assets - total liabilities can any one explain please.

ashakantaxharma

Return on assets (ROA) is a financial ratio that shows the percentage of profit that a company earns in relation to its overall resources (total assets).

Calculation: Net Income after tax / Total assets (or Average Total assets)

Clintm15

Asset turnover is simply a Sales to Capital Employed ratio.

Capital employed = Total assets - Current liabilities.

Removing the short-term liabilities from assets reflects the long-term capital invested in the business, i.e all of the capital that isn't about to be paid off shortly.