1) A company has the following items for the fiscal year 2020: Revenue = 10 million Total current asset = 5 million Net Property, Plant, and Equipment = 2.5 million Total assets = 8 million Calculate the company’s Asset turnover and Fixed-asset turnover

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1) A company has the following items for the fiscal year 2020: Revenue = 10 million Total current asset = 5 million Net Property, Plant, and Equipment = 2

Finance Jan 17, 2021

1) A company has the following items for the fiscal year 2020:

Revenue = 10 million
Total current asset = 5 million
Net Property, Plant, and Equipment = 2.5 million
Total assets = 8 million

Calculate the company’s Asset turnover and Fixed-asset turnover

Expert Solution

Asset turnover = sales or revenue/average total assets.

= $10/8 = 1.25

Fixed asset turnover ratio = revenue/fixed assets.

= 10/2.5 = 4

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