Fixed asset turnover (TTM)
factor.formula
Fixed asset turnover ratio (TTM):
Average fixed assets:
This formula calculates the efficiency of a company in generating sales revenue using its fixed assets over the past 12 months. Where:
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The total operating income of the last 12 months (Trailing Twelve Months, TTM). Using TTM data can more accurately reflect the company's recent operating conditions and income levels.
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Average fixed assets represent the average value of fixed assets held by the enterprise during the reporting period. Using the average value can more accurately reflect the scale of fixed assets during the entire reporting period.
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The total amount of fixed assets at the beginning of the reporting period reflects the value of fixed assets owned by the enterprise at the beginning of the reporting period.
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The total amount of fixed assets at the end of the reporting period reflects the value of fixed assets owned by the enterprise at the end of the reporting period.
factor.explanation
The fixed asset turnover ratio (TTM) reflects the ability of an enterprise to generate sales revenue using its fixed assets in the past 12 months. The higher the ratio, the more efficient the enterprise management is in using fixed assets for business activities, and the stronger the enterprise's ability to generate revenue through fixed assets. On the contrary, if the ratio is low, it may mean that the enterprise's fixed assets are not used efficiently, there are idle or inefficient assets, and further analysis of the reasons and optimization of asset allocation and use may be required.
This indicator can be used for cross-industry and peer comparison to evaluate the operating efficiency and management level of the enterprise. In addition, the changing trend of this indicator can also reflect the development and changes of the enterprise in fixed asset management and operation.