07C. Asset Management KPIs: Fixed Asset Turnover Ratio

Episode 7 of Building Your Multi Million Dollar Practice is our last session that digs into each KPI specifically. It is split into three parts and covers Debt to Equity, Interest Coverage, and Fixed Asset Turnover ratios. This ratio looks at the net value of the fixed assets and how many sales can be generated through the fixed assets. This is most valuable for a company like a manufacturing plant that owns the equipment. When there’s a higher ratio, there tends to be a higher efficiency, but you have to understand how depreciated the fixed assets are and how efficient a sale is that comes from using those assets. The Formula: Total Assets / Fixed Assets