The Asset Turnover ratio (or its inverse, the assets to sales ratio) is used to show how effectively the firm uses its assets to generate sales.
In general, a firm will want a high or improving Asset Turnover ratio (or conversely a low or declining asset to sales ratio).
Note that the assets at the start of the year is typically obtained from using the figure at the end of the previous year. Also, the assets figure can use total assets, net assets (total assets minus current liabilities) or some other category of asset.
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