Total Aset Turnover Analysis of Sime Darby and Ioi

Topics: Palm oil, Balance sheet, Investment Pages: 2 (342 words) Published: July 29, 2010
Total Asset Turnover
SIME DARBY| | 2007| 2008| 2009|
Total Asset Turnover| Sales Total Asset| 2823020033213800 = 0.8500| 3404470035972700 = 0.9464| 3101390035439900 = 0.8751| IOI| | 2007| 2008| 2009|
Total Asset Turnover| Sales Total Asset| 895272713680842 = 0.6544| 1466536917261224 = 0.8496| 1460047415981954 = 0.9136|

Total assets turnover provides us a review on how efficient with the group used its assets to generate sales revenue. Generally, the higher this ratio, the more efficient the group is using its assets to generate sales. IOI GROUP

The total asset turnover of the IOI group has increased from the year 2007 to the year 2008.The reason for that trend was mainly due to the increase in sales from the year 2007 to the year 2008. It revealed that the sales of the company have increased with the amount of money invested in total assets in the year 2008. A tremendous increase in sales was probably because there was an expansion in business and investments in 2008 which helped the group to generate more sales from the investments made. The ratio value further increased in the following year despite a slightly decline in sales due to the higher percentage of decline in total assets especially inventories as an effect of recession. Besides measuring the efficiency of the group using its assets to generate sales, total asset turnover also indicates pricing strategy: a company with low profit margin tend to have high asset turnover, while those with high profit margin have low asset turnover.


Total asset turnover of Sime Darby has increased from 2007 to 2008 due to large increases in sales (because of factors stated in account receivable turnover part). Total asset turnover has decreased in financial crisis year 2009 because of the large fall in crude palm oil price which affect sales volume directly. Fortunately, total asset of the group do not have significant change in the nature of the company...
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