- This topic has 1 reply, 2 voices, and was last updated 7 years ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- The topic ‘Ratio’ is closed to new replies.
Interactive BPP books for June 2026 exams, recommended by OpenTuition.
Get discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Ratio
Sir, why does a low asset turnover suggests a capital intensive industry ?
Asset turnover is calculated as revenue / net assets
If this figure is, say, 1 that means that the assets are earning their own value just once each year and that, in turn, suggests high value assets (in other words “capital intensive”)
On the other hand, if the ratio is, say, 100 that suggests that low value assets are generating masses of revenue
Does that make sense to you?
