The fixed asset turnover ratio is sales divided by average net fixed assets. ("Net" means net of accumulated depreciation.) In this problem, we do not have enough information to calculate average net fixed assets, so we must use the year-end information given. This is sales divided by total assets, not net fixed assets.
The fixed asset turnover ratio is sales divided by average net fixed assets. ("Net" means net of accumulated depreciation.) In this problem, we do not have enough information to calculate average net fixed assets, so we must use the year-end information given. Sales of $3,000,000 divided by net fixed assets of $1,300,000 equals 2.31. The company is generating 2.3 times its net fixed assets in sales.
The fixed asset turnover ratio is sales divided by average net fixed assets. ("Net" means net of accumulated depreciation.) In this problem, we do not have enough information to calculate average net fixed assets, so we must use the year-end information given. This is total assets divided by sales.
The fixed asset turnover ratio is sales divided by average net fixed assets. ("Net" means net of accumulated depreciation.) In this problem, we do not have enough information to calculate average net fixed assets, so we must use the year-end information given. This is net fixed assets divided by sales.
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