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In an effort to learn how to apply the Finance King Criteria, I have been going through the very helpful AXP example provided by TMF Grape (http://www.fool.com/portfolios/rulemaker/2000/rulemaker000310.htm). When I tried to duplicate his Asset Turnover calculation, I ran into a problem. He states that dividing AmEx's Revenues of $5,311M by its Total Assets of $132,616 yields an Asset Turnover ratio of 16%. However, dividing 5,311 by 132,616 equals 4%. Am I missing something?

Thanks very much,
Irv
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My young Jedi,

When you are using quarterly data, you should multiply revenues by 4. This would give the correct Asset Turnover ratio of 16%.


Gary
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You should take the TTM Revenue and divide it by the average Total Assets for the past four quarters.

The method used in the example was estimated by multiplying quarterly Revenue by 4 and dividing by Total Assets for that quarter.

Marv
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Marv and Gary,
Thanks for the replies. That's another small step from Phooldom to Fooldom. :)
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