Fixed Asset Turnover Ratios
For example, a manufacturing company may require more fixed assets to produce goods than a service-based company. Therefore, the Fixed Asset Turnover ratio may be lower for the manufacturing company, even if their sales are higher than the service-based company. Another important aspect of the FAT ratio is that it can help businesses make informed decisions about their capital expenditures. However, differences in the age and quality of fixed assets can make cross-company comparisons challenging. Older, fully depreciated assets may result in a higher ratio, potentially g
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