Fixed Asset Turnover Ratio

The fixed asset turnover ratio measures the amount of sales revenue the company is generating from each currency unit of only its fixed assets.

“Net property, plant and equipment” means property, plant and equipment net of accumulated depreciation.

Since both the total asset turnover ratio and the fixed asset turnover ratio relate an income statement item to a balance sheet item, the denominator (the assets amount) should be an average balance for the same period represented by the sales amount. The average of the beginning and ending net PP&E balances can be used as the average balance.