The asset turnover ratio is

**calculated**by dividing net sales by**average**total assets. Net sales, found on the income statement, are used to calculate this ratio**returns**and refunds must be backed out of total sales to**measure**the truly**measure**the firm's assets' ability to generate sales.What is the formula for fixed asset turnover ratio?

Definition: The fixed asset turnover ratio is an efficiency ratio that measures a companies return on their investment in property, plant, and equipment by comparing net sales with fixed assets. In

**other**words, it calculates how efficiently a company is a producing sales with its machines and equipment.How do you calculate the average total assets?

Determine the amount of

**average total assets**. To determine your**average total assets**, you will need to go back two years in your bookkeeping.**Find**the amount of your**total assets**for the current year and previous year, then add the two numbers together. Next, divide the**total**amount by 2.