The denominator in the fixed asset turnover ratio is

1 answer:

4 0

The denominator of the fixed asset turnover ratio is AVERAGE FIXED ASSET.
The fixed assert turnover ratio refers to the ratio of sales to the value of fixed asset of a company. The ratio is very important in evaluating how a company is using its fixed assets to generate sales.
Mathematically, fixed asset turnover ratio = Net sales / Average fixed assets.
The numerator is net sales while the denominator is average fixed asset.

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