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.

Comments

  • ashakantaxharma
    ashakantaxharma Registered 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
    +91-98642-72826
    Guwahati, Assam, India
  • Clintm15
    Clintm15 Registered Posts: 248 Dedicated contributor 🦉
    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.
    AAT
    Level 2 - 2011
    Level 3 - 2012
    Level 4 - 2013

    ACCA
    F4 - Corporate Law - Dec 2015 (passed)
    F5 - Performance Management - Dec 2014 (passed)
    F6 - Taxation - Dec 2013 (passed)
    F7 - Financial Reporting - Jun 2014 (passed)
    F8 - Audit & Assurance - Dec 2015 (passed)
    F9 - Financial Management - Jun 2015 (passed)
Privacy Policy