Fixed Assets Turnover Calculator

Calculate the efficiency of your company's fixed assets in generating sales revenue.

What is Fixed Assets Turnover Ratio?

The Fixed Assets Turnover Ratio measures how efficiently a business uses its fixed assets to generate sales. It reflects the company's ability to turn its investments in fixed assets, such as buildings, machinery, and equipment, into revenue. A higher ratio indicates better utilization of assets.

Formula for Fixed Assets Turnover Ratio

The formula for calculating the Fixed Assets Turnover Ratio is:

Fixed Assets Turnover Ratio = Net Sales / Average Fixed Assets

This formula divides the company's net sales by its average fixed assets to show how effectively assets are being used.

Example Calculation

Suppose a company has net sales of $1,000,000 and average fixed assets valued at $500,000. Using the formula:

Fixed Assets Turnover Ratio = $1,000,000 / $500,000 = 2

This ratio of 2 means that for every dollar invested in fixed assets, the company generates $2 in sales revenue, indicating efficient use of assets.