fixed asset turnover


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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.

fixed asset turnover

A financial ratio that indicates a firm's ability to generate sales based on its long-term assets. Fixed asset turnover is calculated by dividing annual sales by the dollar amount of fixed assets. A high fixed asset turnover indicates management's effective use of the firm's fixed assets.
References in periodicals archive ?
Later, by applying the Hazard model, he found fixed asset turnover, capital turnover and price to book value as having a positive impact on failure probability.
The inventory turnover and fixed asset turnover ratios are significantly higher in U.
3 Receivables turnover ratio index X 2 Inventory turnover ratio Current asset turnover ratio Fixed asset turnover ratio Total asset turnover ratio Profitability 0.
To sum up, as it is confirmed by the F-test statistics, the main explanatory variables of the profitability of the real estate companies were the fixed asset turnover, the return on sales and the level of fixed assets and debt (included into the asset coverage ratio), all of them provided by an expansive economic cycle characterized by a high level of sales and a high leverage of the companies.
Firm size is represented by share capital, profitability is measured through EPS, public ownership is in percentage, capital structure is represented by the ratio of long term debt to total assets, dividend payout at actual, efficiency is measured through fixed asset turnover, growth rate is noted through sales growth rate, liquidity is measured by current ratio, and business risk is represented by operating leverage.
In a sample of 200 small, privately-held manufacturing firms, the study examined whether significant differences exist between firms providing only standard products ("efficiency firms"), those providing only made-to-order products ("flexibility firms"), and those providing both standard and made-to-order products ("mix firms") in terms of working capital turnover, fixed asset turnover, cost structure, and margins.
Fixed asset turnover focuses specifically on how well the cooperative business uses its fixed assets to generate sales.
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.
Finally, Table X shows fixed asset turnover ratios.
9 (days) Fixed Asset Turnover Total Asset Turnover Times Interest Earned (TIE) 1.
Other commodity groups which do less processing--such as poultry/livestock cooperatives--have higher fixed asset turnover ratios.