Note No. Total Assets Turnover Ratio Meaning of total assets turnover ratio : It is the ratio of sales to total assets. It is intended to reflect the intensity with which assets are employed. This ratio focuses on the use of assets made by a company and it is considered to be a prime determinant of the level of future income inflows. Formula to Learn Total Assets Turnover Ratio Net Sales / Turnover Number of Times Total Assets Significance of total assets turnover ratio : A low ratio indicates that the assets are not being effi- ciently employed. A high ratio indicates that the assets are being utilised efficiently. Illustration 33 From the following Balance Sheet of Avinash Ltd, you are required to calculate: (i) Working Capital Turnover Ratio; and (ii) Total Assets Turnover Ratio. Balance Sheet of Avinash Ltd. as at 31st March, 2018 Amount Particulars ) (1) (2) (3) 1. EQUITY AND LIABILITIES (1) Shareholders' Funds: e33 (a) Share Capital - Equity Share of 10 each fully paid 5,00,000 (b) Reserves and Surplus - General Reserve 2,00,000 (2) Share Application Money Pending Allotment : (3) Non-current Liabilities: (4) Current Liabilities: (a) Trade Payables - Sundry Creditors 2,20,000 Bills Payable 30,000 (b) Other Short-term Provision - Provision for Income Tax 50,000 TOTAL 10,00,000 II. ASSETS (1) Non-current Assets (a) Fixed Assets (0) Tangible Assets Plant and Machinery 4,00,000 (2) Current Assets : (a) Current Investments 1,00,000 (b) Inventories 1,00,000 (c) Trade Receivables - Sundry Debtors 2,00,000 Bills Receivables 50,000 (d) Cash and Cash Equivalents - Cash at Bank 1,50,000 TOTAL 10,00,000 (1) Total sales during the year 31,00,000. (ii) Sales return during the year 1,00,000