Is current asset / total asset ratio ,sales / current assets ratio are the same meaning?
we can use this ratio to find out the how efficiency the company using its asset to create revenue?
can use current asset / total asset and non-current asset / total asset to classify which industry the company belong?
Hi Cheng Wong,
If you want to know how efficient the asset is being use to create revenue or profit. I think ROA will be the ratio to look at.
If you want to know whether the company is capital intensive, you can use the ratio that we had taught in IQ which is fixed asset/Total asset.
Fixed asset = inventory + PPE
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