What is a Fixed Asset Ratio? How to Calculate fixed asset ratio?

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