Which of the following expresses the asset turnover ratio?

• A. Total assets divided by net operating revenue.
• B. Net operating revenue divided by total assets.
• C. Net income divided by total assets.
• D. Operating cash flow divided by total assets.

Answer: (B)

Asset turnover measures how effectively assets generate revenue. It is calculated as revenue divided by assets, showing how many dollars of revenue are produced per dollar of assets. In practice, many formulas use average total assets, but the core idea remains revenue over assets. Therefore, the expression that uses net operating revenue divided by total assets matches this concept. The other options mix the numerator and denominator to reflect profitability (net income) or a different metric (cash flow over assets) or invert the relationship, which does not describe asset turnover.