Question

Nvidia Corporation, a global technology company located in Santa Clara, California, reported the following information in its 2017 financial statements ($ in millions): 2017 2016 Balance sheets Property, plant, and equipment (net) $ 462 $ 525 Income statement Net sales for 2017 $ 5,030 Required: 1. Calculate the company’s 2014 fixed-asset turnover ratio.

Answer 1

10.19 times

Step-by-step explanation:

The fixed asset turnover ratio is the ratio of net sales to average total fixed assets.

It is a financial ratio that measures the efficiency of a company's utilization of its fixed assets in generating revenue.

Average fixed asset = ($462 + $525)/2

= $493.5 0

2017 fixed-asset turnover ratio

= $5,030/$493.5 0

= 10.19 times

Answer 2

10.19 times

Step-by-step explanation:

It is ratio of Sales to the fixed asset of a company. It shows that how effectively the company using its fixed assets to generate the revenue. It measures the efficiency of the fixed asset in making sales.

It uses the net sales value and the average net fixed assets of the company.

Net Sales =

Average Fixed Assets = ($462 + $525) / 2 = $987 / 2 = $493.5

Fixed Asset Turnover = Net Sales / Average Net Fixed Assets

Fixed Asset Turnover = 5,030 / $493.5 = 10.19 times