What does total asset turnover mean on the CPA exam?
Total asset turnover. Sales divided by average total assets. How many dollars of revenue each dollar of assets produces.
Which CPA exam sections use total asset turnover?
Total asset turnover appears in the FAR section of the CPA exam.
Related terms
- average total assets: The average of opening and closing total assets, used wherever a period flow like sales is compared to a balance.
- equity multiplier: Total assets divided by equity.
- total assets: Everything the entity controls that is expected to produce future benefit, added up.
- net profit margin: Net income divided by sales.
- days sales outstanding: How long on average it takes to collect a receivable, measured as receivables divided by credit sales per day.
- total liabilities: Everything the entity owes, added up.