What Is a Fixed Asset Turnover?

The turnover rate of fixed assets, also known as the utilization rate of fixed assets, is the ratio of an enterprise's sales revenue to the net value of fixed assets. The turnover rate of fixed assets indicates the number of turnovers of fixed assets in a fiscal year, or the sales income supported by 1 yuan of fixed assets.

Turnover rate of fixed assets

There are three types of fixed asset turnover:

(1) = Sales revenue / average

Notes on turnover of fixed assets

1. The denominator of this indicator uses the average net fixed asset value. Therefore, the comparison of indicators will be affected by the depreciation method and the depreciation period. Attention should be paid to its comparability.

2. When the net value of fixed assets of an enterprise is too low (such as due to stale assets or excessive depreciation), or when the enterprise is a labor-intensive enterprise, this ratio may not have much meaning.