The fixed asset turnover ratio is a measure of the efficiency of a company.
BT: Knowledge

Question

Quizplus · Accepted Answer

The fixed asset turnover ratio is calculated by dividing the net sales by the net value of fixed assets. This ratio measures how efficiently a company is using its fixed assets to generate revenue. A higher fixed asset turnover ratio indicates greater efficiency, whereas a lower ratio indicates inefficiency. Therefore, the statement is true.

The Fixed Asset Turnover Ratio Is a Measure of the Efficiency