fixed asset turnover ratio

What Factors Can Affect the Ratio?

Several factors can impact the Fixed Asset Turnover Ratio, including:
- Industry Type: Capital-intensive industries like manufacturing typically have lower ratios compared to service-based industries.
- Asset Lifespan: The useful life of the assets can influence the ratio. Longer lifespan assets might lead to a lower ratio.
- Depreciation: The method of depreciation used can affect the net book value of fixed assets, thereby impacting the ratio.
- Sales Volume: Naturally, higher sales will improve the ratio, assuming the fixed assets remain constant.

Frequently asked queries:

Relevant Topics