Asset Utilization

View Financial Glossary Index

Definition

The asset utilization ratio calculates the total revenue earned for every dollar of assets a company owns.

For example, with an asset utilization ratio of 52%, a company earned $.52 for each dollar of assets held by the company. An increasing asset utilization means the company is being more efficient with each dollar of assets it has.

This ratio is frequently used to compare a company's efficiency over time.

Formula

Asset Utilization = Revenue / Average Total Assets
(Note: YCharts calculates this value using Asset Utilization = TTM Revenue / Average of Total Assets from Last Four Quarters)

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