Fixed assets ratio
factor.formula
Fixed assets ratio:
This formula calculates the fixed asset ratio at a specific point in time t.
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It indicates the book value of the company's fixed assets at the end of a specific reporting period. Fixed assets usually include tangible assets such as land, buildings, machinery and equipment that are used for a long time in the production and operation process.
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It represents the book value of the total assets of an enterprise at the end of the same reporting period t, including the sum of current assets and non-current assets.
factor.explanation
The fixed asset ratio is an important indicator for measuring a company's asset structure. In the same industry, a lower fixed asset ratio usually indicates that the company has higher asset liquidity, which means that the company can convert assets into cash more quickly, thereby improving its operating efficiency and financial flexibility. However, a too low fixed asset ratio may also mean that the company's investment in fixed assets is insufficient, which may affect its long-term development capabilities. Therefore, when evaluating the fixed asset ratio, it is necessary to make a comprehensive consideration of the company's industry characteristics, development stage and strategic goals.