It is shown that the optimum aspect ratio at which max efficiency occurs is relatively low, typically between 1 and 1.5. At these aspect ratios, inaccuracies inherently exist in the decomposition of the flow field into freestream and endwall components due to the absence of a clear freestream. In this paper, a unique approach is taken; McKenzie’s ‘linear repeating stage’ concept is used plus a novel way of defining the freestream flow is proposed. Through this unique approach, physically accurate decomposition of the flow field for aspect ratios as low as ~0.7 can be achieved. This ability to accurately decompose the flow field leads to several key findings. Firstly, the endwall flow is found to be dependent on static pressure rise coefficient and endwall geometry, but independent of aspect ratio. Secondly, the commonly accepted relationship of endwall loss coefficient varying inversely with aspect ratio is physically inaccurate. Instead, a new term, which the authors refer to as ‘effective aspect rati o’, should replace aspect ratio. It is shown that not doing so can result in efficiency errors of ~0.6% at low aspect ratios. Finally, there exists a low aspect ratio limit below which the two endwall flows interact causing a large separation to occur along the span. From these findings, a low order model is developed to model the effect of varying aspect ratio on performance. The last section of the paper uses this low order model as well as a simple analytical model to show that to a first order, the optimum aspect ratio is just a function of the loss generated by the endwalls at zero clearance and the rate of change in profile loss due to blade thickness. This means that once the endwall configuration has been selected i.e. cantilever or shroud, the blade thickness sets the optimum aspect ratio.