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Asset turn over net assets

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.


  • ashakantaxharmaashakantaxharma Guwahati, Assam, IndiaRegistered Posts: 9
    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)
    Asha Kanta Sharma
    Guwahati, Assam, India
  • Clintm15Clintm15 Well-Known FarehamRegistered Posts: 247
    edited August 2019
    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.
    Level 2 - 2011
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