Business and Personal Finance Dictionary

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• FIXED ASSET TURNOVER
  
  measures management's ability to generate revenues from investments in fixed assets. FAT considers only the firm's investment in property, plant and equipment and is extremely important in high asset firms such as manufactures and telecommunications companies. Generally, the higher this ratio: * the smaller the investment required to generate sales, thus the more profitable the firm. * indicates the firm has less money tied up in fixed assets for each dollar of sales revenue. A declining ratio may indicate that the firm has over-invested in plant, equipment, or other fixed assets.
  
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