Would you expect a brick-and-mortar retailer or an online retailer to have a higher asset turnover? Which supply chain drivers impact asset turnover?

Question

Israel Castaneda

Business

1 August, 05:14

Would you expect a brick-and-mortar retailer or an online retailer to have a higher asset turnover? Which supply chain drivers impact asset turnover?

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Answers (1)

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Isabell Oconnell · Answer 1

I would expect an online retailer to have a higher asset turnover over a brick-and-mortar retailer because they are more adaptable to change as per the customers choice, they have many choice options for their customers and are more relaxed with their product pricing strategy.

Explanation:

Asset turnover ratio is used to calculate the productivity of an asset. A company's productivity is directly proportional to its asset turn over ratio.

The formula for calculating

Asset Turnover Ratio = Total Sales of an asset/Average total asset

The supply chain drivers that affect asset turnover are Accounts receivable, inventory, transportation, information, facilities, sourcing and pricing.