What is a clean turnover turnover?
A net turnover of assets is a financial measurement to assess how well the company will change its assets into income. In general, it is calculated as the ratio of the distribution of the total sales of the company over a period of time by the total value of its assets over the same period. A company with a high net ratio of asset turnover usually does effective work when transforming its capital into income. On the other hand, a low ratio could be a sign of inefficiency, although the situation is most effective compared to companies in similar sectors.
There are many ways to assess the financial health of companies on a particular market. Investors and entrepreneurs owners use these tools to assess the strengths of companies and areas where they can miss them. Financial conditions take statistics obtained from reports on income and balance sheet and create conditions that are useful for comparison of similar companies. One of the ways the companies are assessed in terms of the effect of converting asset for sale is simpleDirectional to the network of asset turnover. A company with important assets, but sums of sales, can be somewhere in an area that needs to be addressed. For the same reason, the extremely high turnover ratio could mean that the company is doing a bad job in investing its assets, which could lead to stagnation in the face of a more aggressive competition.
Calculation of the ratio of net assets requires the sum of the sum of the company of the company from the period that can be found in the income report and divided this amount with the total assets it has in the same period, which is shown in the balance sheet of the company. As an example, imagine that a company A has a total of $ 100,000 in a certain year in a certain year of total assets and $ 80,000 on sale this year. Division80,000 USD USD $ 100,000 brings a ratio of 0.8. This means that the company has changed 80 percent of its assets for sale.
whenever someone uses a financial ratio, such as the one who measures a clean turnover turnover, should be aware of the ratio of the ratio. Companies from different industries should not be compared, simply because different industries require a different amount of assets to be kept properly. In addition, younger companies are likely to have lower conditions simply because most of their excess assets are likely to be tied in investment.