Switch to:
BHP Billiton Ltd  (NYSE:BHP) Asset Turnover: 0.17 (As of Jun. 2017)

Asset Turnover measures how quickly a company turns over its asset through sales. It is calculated as Revenue divided by Total Assets. BHP Billiton Ltd's Revenue for the six months ended in Jun. 2017 was \$19,489 Mil. BHP Billiton Ltd's Total Assets for the quarter that ended in Jun. 2017 was \$118,271 Mil. Therefore, BHP Billiton Ltd's asset turnover for the quarter that ended in Jun. 2017 was 0.17.

Asset Turnover is linked to ROE % through Du Pont Formula. BHP Billiton Ltd's annualized ROE % for the quarter that ended in Jun. 2017 was 9.43%. It is also linked to ROA % through Du Pont Formula. BHP Billiton Ltd's annualized ROA % for the quarter that ended in Jun. 2017 was 4.54%.

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

BHP Billiton Ltd Annual Data

 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Jun17 Asset Turnover 0.40 0.39 0.32 0.25 0.33

BHP Billiton Ltd Semi-Annual Data

 Dec07 Jun08 Dec08 Jun09 Dec09 Jun10 Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17 Asset Turnover 0.15 0.13 0.13 0.16 0.17

Calculation

Asset Turnover measures how quickly a company turns over its asset through sales.

BHP Billiton Ltd's Asset Turnover for the fiscal year that ended in Jun. 2017 is calculated as

 Asset Turnover = Sales / Average Total Assets = Revenue (A: Jun. 2017 ) / ( (Total Assets (A: Jun. 2016 ) + Total Assets (A: Jun. 2017 )) / 2 ) = 38285 / ( (118953 + 117006) / 2 ) = 38285 / 117979.5 = 0.32

BHP Billiton Ltd's Asset Turnover for the quarter that ended in Jun. 2017 is calculated as

 Asset Turnover = Sales / Average Total Assets = Revenue (Q: Jun. 2017 ) / ( (Total Assets (Q: Dec. 2016 ) + Total Assets (Q: Jun. 2017 )) / 2 ) = 19489 / ( (119535 + 117006) / 2 ) = 19489 / 118270.5 = 0.16

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Companies with low profit margins tend to have high asset turnover, while those with high profit margins have low asset turnover. Companies in the retail industry tend to have a very high turnover ratio.

Explanation

Asset Turnover is linked to Return on Equity (ROE) through Du Pont Formula.

BHP Billiton Ltd's annulized ROE % for the quarter that ended in Jun. 2017 is

 ROE % (Q: Jun. 2017 ) = Net Income / Total Equity = 5372 / 56953.5 = (Net Income / Revenue) * (Revenue / Total Assets) * (Total Assets / Total Equity) = (5372 / 38978) * (38978 / 118270.5) * (118270.5/ 56953.5) = Net Margin % * Asset Turnover * Leverage Ratio = 13.78 % * 0.3296 * 2.0766 = ROA % * Leverage Ratio = 4.54 % * 2.0766 = 9.43 %

Note: The Net Income data used here is two times the semi-annual (Jun. 2017) net income data. The Revenue data used here is two times the semi-annual (Jun. 2017) revenue data.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

It is also linked to Return on Assets (ROA) through Du Pont Formula:

BHP Billiton Ltd's annulized ROA % for the quarter that ended in Jun. 2017 is

 ROA % (Q: Jun. 2017 ) = Net Income / Total Assets = 5372 / 118270.5 = (Net Income / Revenue) * (Revenue / Total Assets) = (5372 / 38978) * (38978 / 118270.5) = Net Margin % * Asset Turnover = 13.78 % * 0.3296 = 4.54 %

Note: The Net Income data used here is two times the semi-annual (Jun. 2017) net income data. The Revenue data used here is two times the semi-annual (Jun. 2017) revenue data.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Be Aware

In the article Joining The Dark Side: Pirates, Spies and Short Sellers, James Montier reported that In their US sample covering the period 1968-2003, Cooper et al find that firms with low asset growth outperformed firms with high asset growth by an astounding 20% p.a. equally weighted. Even when controlling for market, size and style, low asset growth firms outperformed high asset growth firms by 13% p.a. Therefore a company with fast asset growth may underperform.

Therefore, it is a good sign if a company's asset turnover is consistent or even increases. If a company's asset grows faster than sales, its asset turnover will decline, which can be a warning sign.

Related Terms