Asset Turnover Ratio
Calculate the asset turnover ratio, an efficiency ratio that measures how efficiently a company uses its assets to generate sales.
The asset turnover ratio is calculated by dividing the company’s net sales (revenue) by its average total assets. It measures how well a company utilizes its assets to generate revenue. A higher asset turnover ratio indicates that the company is generating more revenue per unit of assets, which is generally seen as a positive sign of operational efficiency.
The formula is as follows:
\[\text{Asset Turnover Ratio} = \text{Net Sales} / \text{Average Total Assets}\]Also known as: asset efficiency, revenue per asset.
Asset Turnover Ratio in Python or via the MCP
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_asset_turnover_ratio as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(
["TGT", "BBY", "DG"],
api_key="FINANCIAL_MODELING_PREP_KEY",
start_date="2021-01-01",
end_date="2025-12-31",
)
toolkit.ratios.get_asset_turnover_ratio()
Or, after setting up the Finance Toolkit MCP, ask:
How much revenue did Target, Best Buy and Dollar General generate per dollar of assets from 2021 to 2025?
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| BBY | 2.8307 | 2.7801 | 2.8243 | 2.7919 | 2.8311 |
| DG | 1.3114 | 1.366 | 1.2923 | 1.3116 | 1.3761 |
| TGT | 2.018 | 2.0368 | 1.9765 | 1.884 | 1.7872 |
Parameters
get_asset_turnover_ratio accepts the following parameters.
| Parameter | Type | Description | Example |
|---|---|---|---|
rounding | int | None | The number of decimals to round the results to. Defaults to None, which uses the rounding of the Toolkit (4 unless set otherwise). | 2 |
growth | bool | Whether to calculate the growth of the ratios. Defaults to False. | True |
lag | int | list[int] | The lag to use for the growth calculation. Defaults to 1. | 4 |
compound | bool | Whether the growth is the compound annual growth rate over the lag (e.g. lag=5 for the five-year CAGR) instead of the total change. Defaults to False. | False |
standardize | bool | Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False. | True |
trailing | int | The number of periods to sum flows (income and cash flow statement items) over, with balance sheet items averaged over the same number of period ends. E.g. 4 with quarterly data gives the trailing twelve months (TTM) and 3 with annual data a three-year cumulative figure. Defaults to None, which uses single-period flows (per quarter and not annualized with quarterly data). | 4 |