Calculate Apple Inc.’s fixed assets turnover ratio based on the given information.Īverage Net Fixed Assets = (Opening Net Fixed Assets + Closing Net Fixed Assets) / 2 During the year, the company booked net sales of $260,174 million, while its net fixed assets at the start and end of 2019 stood at $41,304 million and $37,378 million, respectively. Let us take Apple Inc.’s example now’s annual report for the year 2019 and illustrate the computation of the fixed asset turnover ratio. was more effective in the use of its fixed assets during 2019. Therefore, XYZ Inc.’s fixed asset turnover ratio is higher than that of ABC Inc., which indicates that XYZ Inc. Fixed Asset Turnover Ratio = $70 million / $24 million.Fixed Asset Turnover Ratio = $50 million / $22 million.The formula to calculate the Fixed Asset Turnover Ratio is as below:įixed Asset Turnover Ratio = Net Sales / Average Net Fixed Assets Average Net Fixed Assets = ($22 million + $26 million) / 2.Average Net Fixed Assets = ($20 million + $24 million) / 2.The formula to calculate Average Net Fixed Assets is as below:Īverage Net Fixed Assets = (Opening Net Fixed Assets + Closing Net Fixed Assets) / 2 According to the latest annual reports, the following information is available:
Also, calculate which company utilizes its fixed assets better. Calculate the fixed assets turnover ratio of both of those businesses on the basis of the above-given information. Both companies belong to the same industry of ice cream manufacturing.
and XYZ Inc., to illustrate the fixed asset turnover ratio concept. Let us take the example of two companies, ABC Inc.
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