Asset Turnover Ratio

The Asset Turnover Ratio is the net sales divided by average total assets.

This ratio shows how much revenue came in for every dollar invested. The higher this ratio is the better. A company that requires a huge capital investment like a utility will naturally have a smaller asset turnover ratio than a company that requires little in the way of equipment, like a web design company.

https://accounting.uworld.com/cpa-review/lc/accounting-dictionary/term/asset-turnover-ratio/