Financial Accounting: Fixed Asset Turnover Ratio

Question

Your company has net sales revenue of $38 million during the year. At the beginning of the year, fixed assets are $10 million. At the end of the year, fixed assets are $12 million. What is the fixed asset turnover ratio?

3.80
1.73
3.45
3.17

Answer 1

Fixed Asset Turnover Ratio = Net Sales/ ((Beginning Net Fixed Assets + Ending Fixed Assets)/2)

Fixed Asset Turnover Ratio = 38/((10 + 12)/2)

Fixed Asset Turnover Ratio = 38/11

Fixed Asset Turnover Ratio = 3.45