(f) Fixed Assets:
Given below is a sample balance sheet:
(f) Fixed Assets:
These are assets which a company builds to produce goods and services. A manufacturing plant would need heavy machines, a software company would need computers, a real estate company would need land, etc. these are all assets from which the company would generate revenues.
Furniture and vehicles are assets which are required by all companies. Although these assets do not generate revenue, they are essential part of business. Along with tangible assets such as plant, machines, cars, furniture, computers etc., some balance sheets may also possess intangible assets such as patents, licences, brand value and others.
The asset turnover ratio, calculated as sales/fixed assets, indicates the efficiency of the assets created by the company in generating revenues.
In the above example, Fixed Assets are at Rs. 200.
