Why is a change in the asset turnover an indicator of future profitability?

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Why is a change in the an indicator of future profitability?

Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.

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Financial statements

ISBN: 978-007802531

5th Edition

Authors: Stephen Barrad

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Question Posted: Mar 17, 2012 06:44 AM

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Why is a change in the asset turnover an indicator of future profitability?

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If assets such as inventory and receivables rise relative to sales it may be that the ...View the full answer

Financial statements

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