Fixed asset turnover ratio

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Fixed asset turnover ratio

Fixed Asset Turnover Ratio

A measure of how efficiently a business generates sales from its investments. That is, it is the ratio of the amount a company earns in sales to the average value of its fixed assets. Fixed assets are investments that cannot easily be converted into cash, e.g. a factory or computer system, and can be quite expensive. Thus, if a company has a high ratio, this means that its sales have kept pace with or exceeded the amount it has invested in fixed assets, which is a positive sign for the company.

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fixed asset turnover

References in periodicals archive ?

43 Asset management ratios Days sales outstanding 79 90 105 100 99 Fixed asset turnover ratio 3.

Warren E. Buffett and Berkshire Hathaway, Inc.(Instructor's Note)

The inventory turnover and fixed asset turnover ratios are significantly higher in U.

A comparison of the financial characteristics of U.S. and U.K. manufacturing firms

For fixed asset turnover ratios (sales over fixed assets), subsidiary firms had higher ratios than did parent firms, indicating that the fixed assets of subsidiary companies were more productive than those of parent firms.

Parent-subsidiary relationships in Japan: some observations from financial statement data