Fixed asset turnover ratio (FATR) is an efficiency ratio that shows how well a company has used fixed assets to generate sales. It compares net sales to fixed assets to calculate a company's return on investment in plants, buildings, equipment, and other fixed assets. 


Fixed Assets Turnover Ratio


Average Fixed Asset

Net Sales 


Lined Circle

Fit For Manufacturing Industry 

The manufacturing sector is where most of the investment is made. Plant, equipment and other fixed assets are purchased in large quantities by manufacturing companies. Construction companies benefit from a fixed asset ratio, which takes a different approach to measure return on assets in the context of top-line growth.

Makes Comparison Easy For Investors 

Investors look at this ratio year after year to see whether fixed assets have improved or deteriorated in efficiency. It also enables them to determine when reinvestments in fixed assets should be made in order to maintain growth targets.

Helps In Planning For Asset Sale And Investment 

If the fixed asset turnover ratio has suddenly plummeted, it signifies that the operations' fixed assets have become outmoded and must be sold.