The formulas used in the calculations are:
\[ \text{Average Fixed Assets} = \frac{\text{Starting Fixed Assets} + \text{Ending Fixed Assets}}{2} \]
\[ \text{Fixed Asset Turnover Ratio} = \frac{\text{Revenue}}{\text{Average Fixed Assets}} \]
This calculator computes the Fixed Asset Turnover Ratio based on the input values of starting fixed assets, ending fixed assets, and revenue. The fixed asset turnover ratio measures how efficiently a company uses its fixed assets to generate sales. A higher ratio indicates better utilization of fixed assets.
Let's assume the following:
Calculate the average fixed assets:
\[ \text{Average Fixed Assets} = \frac{15,000,000 + 18,000,000}{2} = 16,500,000 \]
Calculate the fixed asset turnover ratio:
\[ \text{Fixed Asset Turnover Ratio} = \frac{7,500,000}{16,500,000} = 0.45x \]
Therefore, the fixed asset turnover ratio is 0.45x.
