How this calculator works
Enter total assets from comparable opening and closing balance sheets and net revenue for the period between them. The average-assets modes accept a direct average when more frequent observations are available. Include current and non-current assets. A positive average is required. A zero-sales business can have zero turnover.
Formula
Average total assets = (opening assets + closing assets) / 2. Total asset turnover = net revenue / average total assets. Revenue = turnover * average total assets.
Worked example
Opening assets of $400,000 and closing assets of $600,000 average $500,000. Revenue of $1,000,000 gives turnover of 2 times. Revenue of $300,000 on average assets of $600,000 gives 0.5 times.
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Frequently asked questions
Does turnover measure profit?
It measures sales relative to assets. Costs and margins are separate, so a high ratio can still accompany a loss.
Why average the assets?
Revenue accumulates throughout the period. An average is usually more representative than the closing balance alone.
Can I compare industries?
Asset intensity differs substantially. Use comparable accounting policies and similar businesses when interpreting the ratio.