Indicates the relationship
between assets and revenue.
Things to remember
Companies with low profit
margins tend to have high asset turnover, those with
high profit margins have low asset turnover - indicating pricing strategy.
This ratio is more useful
for growth companies to check if in fact they are
growing revenue in proportion to sales.
[Click
on the image(s) above to see the financial statements]
For Cory's Tequila Co.
$12,154
=
0.85
$14,725
Asset Turnover Analysis:
This ratio is useful to determine the amount of sales that are
generated from each dollar of assets. As noted above, companies
with low profit margins tend to have high asset turnover, those
with high profit margins have low asset turnover. Cory's Tequila Co.'s asset turnover seems to be relatively low, meaning that
it makes a high profit margin on its products. For companies
in the retail industry you would expect a very high turnover
ratio - mainly because of cutthroat and competitive pricing.
Disnat is a division of Desjardins Securities. Desjardins Securities is a member of the Investment Industry Regulatory
Organization of Canada (IIROC)
and a member of the Canadian Investor Protection Fund.
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