Fixed assets to total assets ratio
factor.formula
Fixed assets to total assets ratio:
This formula calculates the ratio of fixed assets to total assets, where:
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The total amount of fixed assets in the most recent reporting period, including houses, buildings, machinery and equipment, is usually taken from the balance sheet.
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Total assets for the most recent reporting period, including current and non-current assets, are usually taken from the balance sheet. This needs to be consistent with the reporting period for fixed assets.
factor.explanation
The lower the ratio of fixed assets to total assets, the stronger the liquidity of the company's assets and the higher the efficiency of capital operation. The interpretation of this indicator needs to be combined with the characteristics of the industry. A lower fixed asset ratio in the same industry may mean that the company is more flexible in operation, less dependent on long-term investment, and more focused on short-term benefits. However, for industries with high fixed asset investment (such as manufacturing), a lower ratio may also indicate insufficient capital investment, which needs to be analyzed based on specific circumstances.