Total Asset Turnover :

Total asset turnover indicates the efficiency with which the firm uses its assets to generate sales. The total asset turnover of IDLC indicates average efficiently of its assets have been used because the higher a firm’s total asset turnover the more efficiently its assets have been used.

The total asset turnover of United Leasing Company is efficient. Because it indicates the ULC has been efficiently using its assets.

                                                                  1997                          1998
IDLC

   Revenue  (Rental)                            760,225,167                801,268,786
   Total Assets                                    2,050,904,961             2,075,899,918
   Total assets turnover                           0.37 times                 0.39 times

 ULC

    Revenue (Rental)                            509,314,689              672,263,098
    Total assets                                    1,324,002,652           1,563,348,607
    Total assets turnover                       0.38 times                   0.43 times

In compared with the IDLC the total asset turnover of ULC is much better because the higher a firm’s total asset turnover the more efficiently its assets have been used.

Lease Operation:    

                                                      1996               1997               1998
IDLC

   Lease contract                     900,700,000      947,000,000      927,100,000

   Growth (%)                                                          5.1                  (2.1)

 
ULC

   Lease contract                      591,000,000       708,000,000     880,000,000

   Growth (%)                                                          20                   24

 
The growth of IDLC was not satisfactory only 5.1% in 1997 and  (2.1%) in 1998. In 1998 the growth was negative i.e. lease contract growth has decreased.

On the other hand, ULC lease contract growth was satisfactory in the year of 1997 & 1998. The lease contract growth of 1998 has increased than 1997.

Per above calculation, ULC”s lease contract growth 292% & 1243% more than IDLC for the year 1997 & 1998 respectively.