Analysts must always be aware of accounting choices and how they affect the calculation of ratios. Therefore, the ratio is very industry specific.Īccounting choices do affect ratios. It is also affected by the amount of leasing that is done by a company. This number is smaller in capital-intensive industries since they have a higher investment in property, plants and equipment. Total asset turnover is a measure of how many dollars of sales are generated by a dollar of assets.Working capital is defined as current assets minus current liabilities. ![]()
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