Efficiency improving
What it measures¶
Asset turnover is a year's revenue divided by the total assets held at the start of that year: how many units of sales each unit of assets brought in. This check compares the latest year's turnover with the year before and asks: did it rise?
Why it is on the page¶
A company that makes more sales from the same assets is using them better — through higher prices, better use of its factories or stores, or less idle stock. Piotroski's checklist counts a rise in turnover as a mark of improving operations. The comparison is with the company's own past, because turnover differs enormously between a supermarket and a power company.
Thresholds, their source and the population they were fitted on¶
| Result | When |
|---|---|
| ✓ passed | asset turnover is higher than the year before (change above 0) |
| ✕ failed | it is the same or lower |
| ○ not evaluable | revenue or the start-of-year total assets of one of the two years is not stored |
- Source: Piotroski (2000), the check he called
F_ΔTURN. - Fitted on: US companies whose shares were priced low against the equity on their balance sheet, fiscal years 1976–1996.
- Evidence grade: peer-reviewed and replicated.
- Basis: own history.
A worked example¶
Honeywell International, fiscal year 2025 (statements stored on 25 October 2026): asset turnover fell by 0.066 — failed.
Apple, the same year: it rose by 0.031 — passed.
What “No verdict” means here¶
The check needs two years of revenue and three year-ends of total assets. With a shorter stored history it is not evaluable, the missing input is named, and it leaves the area's count.
What the verdict is and is not¶
A pass says each unit of assets brought in more revenue than the year before. A large acquisition late in a year can lower turnover without any loss of efficiency. It is not a forecast and not an instruction to trade the shares. See also asset turnover on the Fundamentals page.