Dr. Paul Borosky, DBA, MBA
Business Consultant & Author
Guide 26 of 34 · Financial Ratios
How to Calculate Asset Turnover Ratio (Apple Example)
Same industry. $1.16 vs. $0.46. One ratio shows the gap.
Two companies can earn similar profits while owning very different piles of stuff. Asset turnover tells you how hard a company makes its buildings, equipment, and cash work for every sales dollar. Apple is one of the leanest big companies on earth, and this ratio proves it.
Last Updated: 10/27/2026 · Written by Dr. Paul Borosky, DBA, MBA
The Short Answer
What Is the Asset Turnover Ratio?
Textbook Definition
Total asset turnover divides annual sales by total assets. Fixed asset turnover divides annual sales by net property, plant, and equipment. Both measure how efficiently management uses the company’s resources to generate revenue.
In Plain English
How many dollars of sales does each dollar the company owns produce? Higher means the company gets more out of what it already has. Fixed asset turnover asks the same question about buildings and machines only.
Total Asset Turnover
Sales ÷ Total Assets
Apple, fiscal 2025: 1.16
Fixed Asset Turnover
Sales ÷ Net PP&E
Apple, fiscal 2025: 8.35
Sales come from the income statement. Total assets and PP&E come from the balance sheet. If you are new to PP&E, start with what PP&E is on a balance sheet.
One Real Company
Apple’s Asset Turnover, 2021 to 2025
Sales grew. Total assets barely moved. That is why total asset turnover climbed. PP&E grew a little faster than sales, so fixed asset turnover slipped.
| Line | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Sales | 416,161 | 391,035 | 383,285 | 394,328 | 365,817 |
| Total assets | 359,241 | 364,980 | 352,583 | 352,755 | 351,002 |
| Net PP&E | 49,834 | 45,680 | 43,715 | 42,117 | 39,440 |
| Total asset turnover | 1.16 | 1.07 | 1.09 | 1.12 | 1.04 |
| Fixed asset turnover | 8.35 | 8.56 | 8.77 | 9.36 | 9.28 |
Source: Apple Form 10-K filings, fiscal 2021 to 2025, as analyzed in the book. $ millions.
The Method
How to Read Asset Turnover in 5 Steps
Run both versions.
Total asset turnover covers everything the company owns. Fixed asset turnover isolates buildings and equipment. Together they show where the efficiency comes from.
Read the trend, not the level.
A rising number means more sales from the same base. Apple’s total turnover rose from 1.04 to 1.16 while its assets stayed near $350 billion.
Split the cause.
Turnover moves when sales move or when assets move. Apple’s fixed turnover fell from 9.28 to 8.35 because PP&E grew from $39.4 billion to $49.8 billion.
Compare inside the industry.
A grocer and a utility will never post similar turnover. Compare a company to direct rivals and to its own past.
Connect it to profit.
High turnover plus a solid margin produces a high return on assets. That link is the heart of the DuPont method.
What a Falling Number Can Mean
A slipping fixed asset turnover is not automatically bad news. A company building capacity for the future spends on equipment before the sales arrive. The question is whether sales catch up. Apple’s slide from 9.28 to 8.35 is modest and comes with rising total turnover, so the book treats it as worth watching, not a warning.
Compare It
Apple vs. Microsoft: Asset-Light vs. Asset-Heavy
| Latest fiscal year | Apple | Microsoft |
|---|---|---|
| Total asset turnover | 1.16 | 0.46 |
| Sales per $1 of PP&E | over $8 | barely over $1 |
| Total assets | $359B | $619B |
| Revenue | $416B | $282B |
Microsoft’s fiscal year ends in June, Apple’s in September.
Microsoft is pouring money into data centers for cloud and artificial intelligence, which swells its asset base. Apple outsources most manufacturing and stays lean. That one difference also explains why Apple’s return on assets runs about twice Microsoft’s.
When a Ratio Breaks
Working Capital Turnover: The Asset Ratio That Stops Working
One cousin of asset turnover divides sales by net working capital. It is meant to show how much in sales a company produces from its short-term cushion. Higher is usually better.
There is a catch. The ratio only means something when working capital is positive. Apple’s turned negative after 2021, so the ratio flips negative and swings wildly. In 2023 it hit −220, simply because working capital sat close to zero that year.
| Line | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Sales | 416,161 | 391,035 | 383,285 | 394,328 | 365,817 |
| Net working capital | (17,674) | (23,405) | (1,742) | (18,577) | 9,355 |
| Working capital turnover | −23.5 | −16.7 | −220.0 | −21.2 | 39.1 |
Source: the book. $ millions. The book grades this ratio N/A for Apple.
Microsoft keeps positive working capital, so its version comes out to a sensible five or six. Same ratio, meaningful for one company, meaningless for the other. A good analyst knows when to set a number aside.
Beginner Traps
What Do Beginners Get Wrong About Asset Turnover?
- Comparing turnover across unrelated industries.
- Calling any decline a red flag without asking why assets grew.
- Using only total assets and missing what fixed assets are doing.
- Forgetting that a low-turnover company can still be very profitable.
- Reading one year when big asset purchases land unevenly.
- Treating turnover alone as a verdict on management.
How the Book Grades Apple’s Asset Use
From the Book
One Number, Two Business Models
Asset Ratios · Total Asset Turnover
Apple vs. Microsoft
Apple runs circles around Microsoft here, generating about $1.16 of sales for every dollar of assets versus Microsoft’s $0.46.
Asset turnover is one of nine asset ratios the book works through on Apple, each with five years of numbers and a grade.
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Asset Turnover Questions
What is a good asset turnover ratio?
What is the difference between total and fixed asset turnover?
Is a higher asset turnover always better?
Why is Apple’s asset turnover so much higher than Microsoft’s?
Keep Going
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Written by Dr. Paul Borosky, DBA, MBA, business consultant, author, and adjunct finance instructor with an MBA focused in finance.
This page is for general educational purposes only. It is not investment, financial, tax, accounting, or legal advice, and nothing here is a recommendation to buy or sell any security. Apple and Microsoft figures come from their public filings as analyzed in the book. Apple and Microsoft are trademarks of their respective owners, and this page is not affiliated with or endorsed by either company.