Use the following information to calculate the fixed asset turnover ratio for Alonsa Ltd. for the years

Question:

Use the following information to calculate the fixed asset turnover ratio for Alonsa Ltd. for the years ended December 31, 2017 and 2018. Interpret your results:

Property, plant, and equipment on January 1, 2017 $ 5,250,000

Property, plant, and equipment on December 31, 2017 6,125,000

Property, plant, and equipment on December 31, 2018 5,925,000

Sales in 2017 12,525,000

Sales in 2018 16,750,000

Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.