Question

Your company has net sales revenue of $50 million during the year. At the beginning of the year, fixed assets are $22 million. At the end of the year, fixed assets are $24 million. What is the fixed asset turnover ratio

Answer 1

Answer:

Fixed assets turnover= 2.17

Explanation:

Calculation for The fixed assets turnover

Using this formula

Fixed assets turnover = Net Sales Revenue / Average Fixed Costs

Let plug in the formula

Fixed assets turnover = $ 50 Million / [ ( $ 22Million + $ 24Million) /2]

Fixed assets turnover =$ 50 Million / ($46Million /2)

Fixed assets turnover=$ 50 Million / $23 Million

Fixed assets turnover= 2.17

Therefore Fixed assets turnover will be 2.17