If a company is expanding its facilities,its fixed asset turnover ratio is likely to fall temporarily.
BT: Comprehension

Question

Quizplus · Accepted Answer

Fixed asset turnover ratio measures how efficiently a company generates sales from its fixed assets. If a company is expanding its facilities, it typically means it is investing in new fixed assets, which will temporarily lower the fixed asset turnover ratio as the new assets are not yet fully utilized to generate sales.

If a Company Is Expanding Its Facilities,its Fixed Asset Turnover