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Tuesday, May 17, 2011

Fixed Assets Turnover Ratio Example

Definition: Fixed Assets Turnover Ratio (FATR) is used to measure how efficiently fixed assets are utilized to generate sales revenue. It is also known as sales to fixed assets ratio. A lower ratio indicates under-utilization of fixed assets.

Formula:
Fixed Assets Turnover Ratio = Sales / Net Fixed Assets

Example 1:
PCK Company has total fixed assets of $25 million at cost and an average

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