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Define each of the following terms and give and short example: f. Full capacity sales; target...

Define each of the following terms and give and short example:

f. Full capacity sales; target fixed assets to sales ratio; required level of fixed assets

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Answer #1

1.Full capacity sales - It refers to the sales amount and capacity of firm upto which a firm does not any external financing.

Example- A company operates at 90 percent upto which it doesnot need any external financial and it will be full capacity sales.

2.target fixed assets to sales ratio- It is a ratio of a certain group of assets to the amount of sales. It reflects that the utilization of assets are being optimized .The Higher Target fixed assets to sales ratio is preferred.

3.Required level of fixed assets- Required level of fixed assets reflects that Adequate Fixed Assets A firm needs in order to maximize it's overall productions.

  

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