Definition of imply for English Language Learners. : 1  to express (something) in an indirect way : to suggest (something) without saying or showing it plainly. : 2  to include or involve (something) as a natural or necessary part or result.
It is calculated as: Cost of Goods Sold Ã· Average Inventory. Or. Sales Ã· Inventory. Usually, a higher inventory turnover ratio is preferred, as it indicates that more sales are being generated given a certain amount of inventory.
Formula. The asset turnover ratio is calculated by dividing net sales by average total assets. Net sales, found on the income statement, are used to calculate this ratio returns and refunds must be backed out of total sales to measure the truly measure the firm's assets' ability to generate sales.sset Turnover Ratio. The asset turnover ratio is an efficiency ratio that measures a company's ability to generate sales from its assets by comparing net sales with average total assets. In other words, this ratio shows how efficiently a company can use its assets to generate sales.