The numerator in the fixed asset turnover ratio is sales.
To determine the fixed Asset Turnover ratio, the subsequent components are used: fixed Asset Turnover = sales / common fixed property.
The fixed asset turnover ratio exhibits how green an employer is at generating sales from its current fixed assets. A higher ratio implies that control is the usage of its fixed property extra efficiently.
Within the retail region, an asset turnover ratio of 2.5 or greater can be considered good, even as a business enterprise in the software region is much more likely to intention an asset turnover ratio it is among zero.25 and 0.5.
We can now calculate the constant asset turnover ratio by dividing the internet revenue for the yr through the average constant asset balance, which is equal to the sum of the modern-day and earlier duration balance divided through two.
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