The JIT production strategy has an important effect on other measures of corporate efficiency and profitability. Lower inventory means a reduced total asset figure on the balance sheet, all else being equal. This translates directly into a higher return on total assets (ROTA) ratio. The ROTA ratio divides a company's earnings before interest and taxes by its total assets to determine how effectively the business's operational model utilizes invested funds to generate profit. The asset turnover ratio is another efficiency ratio that reflects a company's ability to generate revenue by dividing net sales by total assets. Decreased inventory means a smaller denominator in both these formulas, leading to healthier ratios across the board.