To find out how well a firm uses or utilizes their asset there are formulas to determine and the two most common are the receivables turnover and inventory turnover. The formulas for calculating these can be found at http://www.netmba.com/finance/financial/ratios/. These financial reports among others help to give management a good idea of the financial health of the company and inform
. decisions. At http://wps.prenhall.com/wps/media/objects/66/68566/.../ch13.ppt is a PowerPoint demonstration of asset utilization ratios as well as additional asset utilizations decisions and formulas for fixed assets turnover ratios. For a complete financial ratio analysis including asset utilization ratios, see the site at http://bizfinance.about.com/od/financialratios/f/Asset_Mngt_Ratios.htm to get the bigger picture of how asset utilizations fit into the larger reports.
