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Fixed Asset Turnover Ratio Calculator
Defination / Uses
The fixed asset turnover rate ( FAT) is, in general, used by observers to measure operating performance. This effectiveness rate compares net deals ( income statement) to fixed means ( balance distance) and measures a company's capability to induce net deals from its fixed- asset investments, namely property, factory, and outfit ( PP&E).
The fixed asset balance is used as a net of accumulated deprecation. A advanced fixed asset development rate indicates that a company has effectively used investments in fixed means to induce deals.
After understanding the fixed asset development rate formula, we need to know how to interpret the results.
We generally assume that the advanced the fixed asset development rate, the better. This is because a high fixed asset development indicates that the company is effective and effective in exercising its fixed means or PP&E.