What Are Average Total Assets

Average Total Asset is the sum of Opening Total Assets and Closing Total Assets divided by two (2). So, it shows average of Assets acquired during current accounting period and previous accounting period.

Mathematically, we can show as follows:

Average Total Assets = Opening Total Assets - Closing Total Assets / 2

 

Average Total Assets is a part of Asset Turnover Ratio and it is used to show how efficient a Management is in using the resources (assets) of business to earn revenue (Sales).