2nd October 2019

myaccountingcourse
9

What is the formula of asset turnover ratio?

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.
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