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How is the fixed-asset turnover ratio computed

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Question - Bed Bath & Beyond is a leading retailer of domestic merchandise and home furnishings. The company's 2011 fixed-asset turnover ratio, using the average book value of property, plant, and equipment (PP&E) as the denominator, was approximately 7.8355. Additional information taken from the company's 2011 annual report is as follows: ($ in thousands)

Book value of PP&E-beginning of 2011: $1,119,292

Purchases of PP&E during 2011: $183,474

Depreciation of PP&E for 2011: $183,820

Equipment having a book value of $2,649 thousand was sold during 2011.

Answer the following questions:

1. How is the fixed-asset turnover ratio computed? Discuss how you would interpret Bed Bath & Beyond's ratio of 7.8355?

2. Use the data to determine Bed Bath & Beyond's net sales for 2011.

Please use as much detail and backup as possible. Do not just answer with the calculations. This is a discussion board post and I need to write two to three paragraphs.

Reference no: EM132095251

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