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A ratio that analysts use to gauge the efficiency with which management is using its...

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Question

Accounting

A ratio that analysts use to gauge the efficiency with which management is using its invested capital
is the fixed asset turnover ratio. The ratio is defined as:
Fixed asset turnover =NetsalesAveragenetPPE
Palfinger AG-Property, Plant, & Equipment
Use the table below to determine the fixed asset turnover ratios for fiscal 2006 and 2007 for Palfinger
and Caterpillar. Explain what this ratio measures. Comment on the trends over time and levels across
companies.
Palfinger ( thousands)
2007
Sales or revenue
Average net PPE
PPE turnover
image

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