net fixed asset turnover

A financial measurement that shows how well a company is utilizing its fixed assets. It is net sales divided by average net fixed assets. The resulting number must be compared to the net fixed asset turnover of other firms in the industry, as well as the company’s historical data, in order to be relevant. An unusually high asset turnover can mean that the company doesn’t have enough productive capacity to meet sales demand or is using old equipment that may be obsolete. A low turnover implies that capital is tied up in fixed assets.