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  • 10-11-2017
  • Business
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The denominator in the fixed asset turnover ratio is

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Erudite1
Erudite1 Erudite1
  • 23-11-2017
The denominator of the fixed asset turnover ratio is AVERAGE FIXED ASSET.
The fixed assert turnover ratio refers to the ratio of sales to the value of fixed asset of a company. The ratio is very important in evaluating how a company is using its fixed assets to generate sales.
Mathematically, fixed asset turnover ratio = Net sales / Average fixed assets.
The numerator is net sales while the denominator is average fixed asset. 
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