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How can analysts derive meaningful information from the Tat ratio?

How do you calculate Tat in accounting?

  • TAT = total asset turnover = revenue + average total assets. From an accounting perspective, firms generate returns via working capital (receivables and inventory) turnover, total asset turnover, operating leverage, and margins (Eisemann, 1997).

What is asset turnover ratio (ATR)?

  • What is the Asset Turnover Ratio? The asset turnover ratio, also known as the total asset turnover ratio, measures the efficiency with which a company uses its assets to produce sales. Sales Revenue Sales revenue is the income received by a company from its sales of goods or the provision of services.

What is a 'good' total turnover ratio?

  • However, for a firm with bigger assets, the expected ratio is lower since most have lower sales and larger assets. Hence, a ratio of value 0.25 to 0.5 is considered as a ‘good’ total turnover asset. Therefore, it is correct to agree that the value that represents a good turnover ratio can vary. So, what is a good total asset turnover ratio?

image-How can analysts derive meaningful information from the Tat ratio?
image-How can analysts derive meaningful information from the Tat ratio?
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