Fixed assets turnover ratio is one of the indicators of activity which shows how efficiently the company manages its fixed assets and expresses what revenues are generated by unit of fixed assets.
Non-current assets are often the average from the beginning and final balance.
Interpretation, comparison and recommended values
- generally, the higher the value, the better
- there is no general recommendation, how much indicator should come out
- important is the comparison over time
- appropriate is the comparison with companies in the same industry
- low values (observed mainly in the form of a decline in the time series) may indicate not sufficient utilization of production capacity or the fact that the company has too much fixed assets