What is Asset Utilization?

Asset utilization measures how effectively a company uses its assets to generate revenue. Simple, right? In an industrial context, assets include machinery, equipment, tools, and even human resources — and how well the company uses them. The interpretation behind this metric is plain-and-simple: A high number indicates that these assets are being used efficiently to produce maximum output, while low asset utilization suggests underuse or inefficiencies. In a factory plant, the assets can be: