A ratio that can be used to examine the efficiency of use of property, plant and equipment is the:

Question

Quizplus · Accepted Answer

Fixed asset turnover measures the amount of revenue generated per dollar of fixed assets, indicating how efficiently a company is using its property, plant, and equipment to generate sales. It is calculated by dividing total revenue by the average net fixed assets. A higher fixed asset turnover indicates better efficiency in the use of fixed assets. Therefore, fixed asset turnover is the best choice to examine the efficiency of use of property, plant and equipment.

A Ratio That Can Be Used to Examine the Efficiency