Your company has net sales revenue of $36 million during the year.At the beginning of the year,fixed assets are $8 million.At the end of the year,fixed assets are $10 million.What is the fixed asset turnover ratio?
A)4.5
B)4.0
C)2.0
D)3.6

Question

Quizplus · Accepted Answer

The fixed asset turnover ratio is calculated by dividing net sales by the average fixed assets for the period. Average fixed assets = ($8 million + $10 million) / 2 = $9 million. Thus, the fixed asset turnover ratio = $36 million / $9 million = 4.0.

Your Company Has Net Sales Revenue of $36 Million During