The fixed asset turnover ratio measures management's ability to generate sales with the use of fixed assets.It is especially valuable for capital intensive companies.

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The statement is true. The fixed asset turnover ratio is calculated by dividing net sales by the total value of fixed assets. It measures how efficiently a company is using its fixed assets to generate revenue. This ratio is particularly important for companies that heavily rely on large, long-term assets such as property, plant, and equipment. By comparing the fixed asset turnover ratio over time or against industry benchmarks, investors and analysts can gain insights into management's ability to optimize the use of these assets to generate income.

The Fixed Asset Turnover Ratio Measures Management's Ability to Generate