Question

A firm only has current assets and fixed assets. Its current assets are $100,000 and total assets are $300,000. The firm's sales are $900,000. The firm's fixed asset turnover is

Answer 1

Firm's fixed asset turnover = 4.5

Step-by-step explanation:

Given:

Current assets = $100,000

Total assets = $300,000

Firm's sales = $900,000

Find:

Firm's fixed asset turnover

Computation:

Fixed assets = Total assets - Current assets

Fixed assets = $300,000 - $100,000

Fixed assets = $200,000

Fixed asset turnover = Sales / Fixed asset

Firm's fixed asset turnover = $900,000 / $200,000

Firm's fixed asset turnover = 4.5