Efficiency ratios measures how well a company utilizes its assets and liabilities (equity) to generate sales.
Efficiency ratios types include the asset turnover ratio, equity turnover ratio, and equity multiplier.
Asset turnover efficiency ratio formula is used to calculate how much revenue you earn on the basis of the total assets you have.
Asset turnover ratio is an efficiency ratio formula that judges how efficiently a company uses its assets to generate revenue.
Equity turnover efficiency ratio is used by the organization to find out how much revenue the shareholder’s equity is able to generate over a course a year.
The asset to Sales Ratio formula is used to find out how much asset a company possesses in regards to the revenue it earns using its assets.
Equity multiplier compares the total assets of the company with the shareholders’ equity of the firm.