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The interpretation of financial statements

4.6 Non-current asset turnover

This ratio measures how efficiently a business can generate sales revenue from the
use of its non-current assets. This is similar to ROCE but in this case we measure
the sales revenue generated for every $1 capital invested in non-current assets in the
business. Generally speaking, the higher the ratio the more efficient the business has
been in using its non-current assets to generate sales revenue.

The non-current asset turnover is calculated as follows:

Sales Revenue
= times p.a.
Non-current assets

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