Fixed asset turnover

Revenue divided by net fixed assets. How much sales the plant generates.

An exporter with ₹4,800 crore of revenue on ₹2,900 crore of net fixed assets turns its plant 1.66 times.

The measure is most useful within a sector and across time, because the level is set by technology rather than by management. A steel plant will never turn as fast as a garment unit, and comparing them says nothing.

Falling turnover with rising capital spending is the signature of a capacity build ahead of demand, which is either good timing or the beginning of a value-destroying cycle.

The answer usually arrives about two years later.