The ratio measuring the number of dollars of sales earned per dollar of fixed assets is the
A) fixed asset turnover ratio
B) days' in assets ratio
C) current asset turnover ratio
D) intangible asset ratio

Question

Quizplus · Accepted Answer

The ratio measuring the number of dollars of sales earned per dollar of fixed assets is the fixed asset turnover ratio. It is calculated by dividing total sales by the value of fixed assets. It shows how efficiently a company is using its fixed assets to generate sales. A higher ratio indicates better utilization of fixed assets.

The Ratio Measuring the Number of Dollars of Sales Earned