Which ratio assesses how efficiently a firm uses its fixed assets?
A)Capital intensity ratio
B)Current ratio
C)Average collection period
D)Fixed asset turnover

Question

Quizplus · Accepted Answer

Fixed asset turnover ratio assesses how efficiently a firm uses its fixed assets by looking at the amount of sales generated per dollar of fixed assets. This ratio is calculated by dividing sales by fixed assets. A higher fixed asset turnover ratio indicates that the firm is using its fixed assets more efficiently to generate sales.

Which Ratio Assesses How Efficiently a Firm Uses Its Fixed