Fixed Assets/Net Worth

Black and White Strong and Bold Community Protest Crisis Hub Facebook Post (27)

Fixed Assets/Net Worth

Dictionary Definition

This ratio measures how much capital has been invested in fixed assets, including manufacturing plants and equipment.


Equation

 

Why it Matters to You

A lower ratio indicates a proportionately smaller investment in fixed assets in relation to net worth and a better ‘cushion’ for creditors in the case of liquidation. A higher ratio would indicate the opposite situation.

0 comments

There are no comments yet. Be the first one to leave a comment!