Fixed asset ratio shows the relationship between a company’s long term funds with Fixed asset.
Fixed Assets ratio is a type of solvency ratio which is calculated by dividing total fixed assets (net of depreciation) of a company with its long-term funds. It shows the amount of fixed assets being financed by long term funds.
Formula of Fixed Asset Ratio
Fixed Asset Ratio = Net Fixed Asset/Long Term Funds
Net Fixed Asset (Net of Depericiation)
Long Term funds = Share Capital (Equity + Preferance) + Reserve & Surplus + Long Term Liabilities
Example how to calculate Fixed Asset Ratio
