Asked by Andrea Cannon on Jun 07, 2024
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When comparing a fixed asset turnover ratio to a total asset turnover ratio,a company with a high amount of inventory will have a much lower fixed asset turnover ratio than total asset turnover ratio.
Fixed Asset Turnover Ratio
A performance metric that evaluates how efficiently a firm uses its fixed assets to generate sales.
Total Asset Turnover Ratio
A financial ratio that measures the efficiency of a company's use of its assets to generate sales revenue.
Inventory
Tangible property held for sale in the normal course of business or used in producing goods or services for sale.
- Understand the differences and interrelations among various turnover ratios.
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Learning Objectives
- Understand the differences and interrelations among various turnover ratios.
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