Question

If ABC’s sales are $1,000,000, while accounts receivable is $100,000, inventory is $45,000, and fixed assets are $132,000, what is ABC’s fixed asset turnover?

Answer 1

Answer:

Fixed asset turnover= 7.58

Explanation:

Giving the following information:

Sales revenue= $1,000,000

Fixed assets= $132,000

To calculate the fixed asset turnover, we need to use the following formula:

Fixed asset turnover= sales revenue / fixed assests

Fixed asset turnover= 1,000,000 / 132,000

Fixed asset turnover= 7.58