abhishreshthaa
Abhijeet S
FIXED ASSETS RATIO
This ratio expresses the relationship between fixed assets and shareholder’s fund.
Formula:-
Fixed Assets Ratio = Fixed Assets
Shareholder’s Fund
Significance:-
This ratio indicates as to how the fixed assets of a concern have been financed by long-term funds and to what extent they have been financed by short-term funds.
The fixed assets ratio should not be more than 1. It should be less than 1. The ideal ratio is 0.67.This would mean that not only all the fixed assets, but also a part of the working capital are financed by long-term funds.
This ratio expresses the relationship between fixed assets and shareholder’s fund.
Formula:-
Fixed Assets Ratio = Fixed Assets
Shareholder’s Fund
Significance:-
This ratio indicates as to how the fixed assets of a concern have been financed by long-term funds and to what extent they have been financed by short-term funds.
The fixed assets ratio should not be more than 1. It should be less than 1. The ideal ratio is 0.67.This would mean that not only all the fixed assets, but also a part of the working capital are financed by long-term funds.