8/5/2023 0 Comments Asset turnover ratio analysis![]() ![]() One alternative would be to sell the current fleet or mortgage it to progressively acquire the new units. A reinvestment program may have to be implemented to substitute the current units for new ones that can increase the fleet’s productivity. An efficient management team that constantly looks for ways to increase productivity and determines the best practices for each process will eventually drive the ratio up, as a larger output will be produced from the same assets.įor Start Airlines, the CFO identified that the problem with sales may be related to the obsolescence of the business’ fixed assets. For example, if a company’s fixed asset fleet hasn’t been updated and the market is moving towards cutting-edge technology, eventually that company will suffer from a reduction in its competitiveness, which will reduce sales and drive the ratio down.Īdditionally, human resources also play a big role in increasing this ratio.
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