# Fixed Asset Turnover Ratio Calculator

## What does it do?

The fixed asset turnover ratio measures the amount of sales activity a business is deriving from its investment in fixed assets. This fixed asset turnover ratio calculator works out the value of the ratio based on input values for revenue and opening and closing fixed assets.

The value of the fixed asset turnover ratio will depend on the industry the business operates in. The higher the ratio, the higher the sales activity for a given level of fixed assets, and the higher the earnings are likely to be. Managements job is to ensure that the fixed assets are managed efficiently, and the trend of the ratio is upwards. Further details on this ratio can be found in our fixed asset turnover ratio tutorial.

## Formula

The fixed asset turnover calculation is carried out using the fixed asset turnover formula by dividing the revenue by the average fixed assets for the period.

`Fixed asset turnover ratio = Revenue / Average fixed assets`

Revenue sometimes referred to as sales or turnover, is found on the income statement. Fixed assets are found on the balance sheet of the business. The average of the opening and closing fixed asset levels is used to avoid distorting the result.

## Instructions

The Excel fixed asset turnover ratio calculator, available for download below, is used to compute the fixed asset turnover ratio by entering details relating to the revenue and the opening and closing fixed asset levels. The calculator is used as follows:

### Step 1

The revenue is entered. Revenue is found on the income statement of the business. It is sometimes referred to as sales, net sales or turnover.

### Step 2

The opening and closing fixed asset levels are entered. The opening and closing fixed asset levels are found on the balance sheets of the business. The figure used for fixed assets should be net of accumulated depreciation.

### Step 3

The fixed asset turnover ratio calculator works out the average value of the fixed assets during the accounting period, and the fixed asset turnover ratio.