Question

Mr. Fixit, Inc.'s fixed asset turnover was 3.0 in 2019 and 2.4 in 2018. This increase in its fixed asset turnover may indicate that the company ______. (Check all that apply.)

Answer 1

- Used its fixed assets more efficiently.

- Had a greater increase in sales relative to its fixed assets.

Explanation:Fixed assets are long term assets that a company acquires,they are also tangible and are non current in nature. This type of assets appear in a company's balance sheet buildings,equipments,lands etc.

WHEN A FIXED ASSET IS EFFICIENTLY UTILIZED IT WILL CONTINUE TO GIVE A HIGHER TURNOVER.

IT CAN ALSO MEAN THAT THE ASSET HAD A GREATER INCREASE IN SALES RELATIVE TO ITS FIXED ASSET.