The higher the fixed asset turnover, the
A) less efficiently a company is using its fixed assets in generating sales
B) more efficiently a company is using its fixed assets in generating sales
C) more efficiently a company is using its current assets in generating sales
D) more efficiently a company is using its intangible assets in generating sales

Question

Quizplus · Accepted Answer

Fixed asset turnover is calculated by dividing a company's net sales by its total fixed assets. A higher fixed asset turnover indicates that the company is generating more sales with the same amount of fixed assets or able to generate the same level of sales with fewer fixed assets, which means the company is using its fixed assets efficiently.

The Higher the Fixed Asset Turnover, the