Asset Performance

DEFINITION of 'Asset Performance'

A business's ability to take productive resources and manage them within its operations to produce subsequent returns. Asset performance is typically used to compare one company's performance over time or against its competition. Possessing strong asset performance is one of the criteria for determining whether a company is considered a good investment.

BREAKING DOWN 'Asset Performance'

Analysts use metrics like the cash conversion cycle, the return on assets ratio and the fixed asset turnover ratio to compare and assess a company's annual asset performance. Typically, an improvement in asset performance means that a company can either earn a higher return using the same amount of assets or is efficient enough to create the same amount of return using less assets.

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RELATED FAQS
  1. Why are efficiency ratios important to investors?

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    Learn what current assets and fixed assets are, examples of current and non-current assets, and the differences between these ... Read Answer >>
  3. What is the fixed asset turnover ratio and why is it important?

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  4. How can a company raise its asset turnover ratio?

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