Fixed-asset turnover is the ratio of sales (on the profit and loss account) to the value of

fixed asset A fixed asset, also known as long-lived assets or property, plant and equipment (PP&E), is a term used in accounting for assets and property that may not easily be converted into cash. Fixed assets are different from current assets, such as cash ...

s (on the balance sheet). It indicates how well the business is using its fixed assets to generate sales.

Fixed\ Asset\ Turnover = \frac

Generally speaking, the higher the ratio, the better, because a high ratio indicates the business has less money tied up in fixed assets for each unit of currency of sales revenue. A declining ratio may indicate that the business is over-invested in plant, equipment, or other fixed assets. In A.A.T. assessments this financial measure is calculated in two different ways. 1. Total Asset Turnover Ratio = Revenue / Total Assets 2. Net Asset Turnover Ratio = Revenue / (Total Assets - Current Liabilities)

References

External links

*http://www.investopedia.com/terms/f/fixed-asset-turnover.asp *http://www.businessdictionary.com/definition/fixed-asset-turnover-ratio.html *http://www.investopedia.com/university/ratios/operating-performance/ratio1.asp Marketing analytics Financial ratios Fixed asset Corporate development {{business-term-stub