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Asset efficiency

A company that generates more revenue from less assets is better than one that requires huge assets to generate little revenue. While this concept seems pretty straight forward, the asset efficiency values change dramatically depending on the industry.

To calculate:

N= per dollar of assets Asset Efficiency = (Revenues / Total Assets) x N

Example: If a company generates $1 million in revenue, using $2 million in assets, the company would generate $50 revenue for every $100 in assets. (50 = (1 / 2) x 100)