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13 July, 00:05

The company has net sales revenue of $4.2 million during 2018. The company's records also included the following information: Assets 12/31/17 12/31/18 Property, plant and equipment $ 2.6 million $ 3.1 million Licensing agreements $ 0.8 million $ 0.7 million Goodwill $ 0.6 million $ 0.6 million Investments $ 0.7 million $ 0.8 million What is the company's fixed asset turnover ratio for 2018

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  1. 13 July, 02:27
    0
    The fixed assets turnover is for 2018 is 1.47

    Explanation:

    Fixed asset turnover=net sales/average fixed assets

    net sales is $4.2 million

    average fixed assets=opening fixed assets+closing fixed assets/2

    opening fixed assets is $2.6 million

    closing fixed assets is $3.1 million

    average fixed assets=$2.6 million+$3.1 million/2

    =$2.85 million

    fixed assets turnover=$4.2 million/$2.85 million

    =1.47
  2. 13 July, 02:42
    0
    1.474

    Explanation:

    Fixed Assets Turnover ratio = Net Sales/Average Fixed Assets

    Fixed Assets opening 2.6

    Fixed Assets closing 3.1

    Total fixed assets 5.7/2=2.85

    by putting values in above formula we get=4.2/2.85=1.474

    In fixed assets we only account for property plant and equipment. where as the good will and licensing agreements are intangible assets
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