Total Asset Turnover Calculator

Instructions: You can use this Total Asset Turnover calculator $$(TAT)$$, by providing the Sales, the current total assets and the previous total assets in the form below:

Sales =
Current Total Assets =
Previous Total Assets =

Total Asset Turnover Calculator

More about the Total Asset Turnover so you can better use the results provided by this calculator, for a topic that is very popular in corporate finance courses .

The Total Asset Turnover is the ratio between sales and the average total assets. This ratio is a measure of asset management, and it roughly indicates how many dollars in sales a firm has for each $1 in assets. In order to calculate the Total Asset Turnover, we use the following formula: $\text{Total Asset Turnover} = \displaystyle \frac{\text{Sales}}{\text{Average Total Assets}}$ Notice that there formula uses the average total assets in the denominator, and not the total assets plain. Example: Calculation of Total Asset Turnover (TAT) Question: Consider the case of a firm that has sales for$46,000, and its total assets are $560,000, and the total assets from the previous year were$678,000. Compute the Total Asset Turnover for this company.

Solution:

This is the information we have been provided with:

 Sales = $$46000$$ Current Total Assets = $$\text{\textdollar}560000$$ Previous Total Assets = $$\text{\textdollar}678000$$

The total asset turnover is computed using the following formula:

$\begin{array}{ccl} TAT & = & \displaystyle \frac{\text{Sales}}{\text{Average Total Assets}} \\\\ \\\\ & = & \displaystyle \frac{\text{\textdollar}46000}{(\text{\textdollar}560000+\text{\textdollar}678000)/2} \\\\ \\\\ & = & \displaystyle \frac{\text{\textdollar}46000}{\text{\textdollar}619000} \\\\ \\\\ & = & 0.07 \end{array}$

Therefore, the total asset turnover is $$0.07$$, for the given sales of $$\text{\textdollar}46000$$, current total assets of $$\text{\textdollar}560000$$, and previous total assets of $$\text{\textdollar}678000$$. This means that for every dollar in assets, the firm generated $$\text{\textdollar}0.07$$ in sales.

Calculators of efficiency financial ratios

The Total Asset Turnover is a very commonly used financial ratio to measure efficiency in assets management. We provide many other financial ratio calculators in our site, including our current ratio , quick ratio , our days' sales in receivables , and our inventory turnover calculator.

A related financial ratio that is usually reported along with the Total Asset turnover is the Total Debt Ratio Calculator ,that has several uses when assessing the financial health of a firm.