CFA Practice Question
What does the fixed asset turnover ratio measure?
A. How well total assets are utilized during a year
B. The amount of EBIT a firm generates per dollar of fixed assets
C. The amount of sales each dollar of fixed assets generates
User Contributed Comments 4
| User | Comment |
|---|---|
| michy | Net Fixed Asset Turnover ratio is a measure of the firm's utilization of fixed assets. |
| steved333 | sales/assets=asset turnover. sales/ fixed assets reads the same as sales per fixed asset... |
| timkalt | I agree with michy and agree with answers A and C as correct. Fixed asset TO ratio is an activity ratio dividing revenue by average fixed assets which then indicates the utilisation and the amount of sales generated by fixed assets. |
| ange | but the answer A says total asset, not fixed asset. They are different! |