A new clinic may often show a lower fixed asset turnover ratio than an older clinic because:

a.)Its management understands state of the art asset purchasing.

b.)It will get lower financing rates.

c.)It generally will have more recently purchased assets.

The information that I have, I do not know which one is best,

"Before condemning Riversides management for poor performance, it should be pointed out that a major problem exists with the use of the fixed asset turnover ratio for comparative purposes. Recall that most as- set values listed on the balance sheet reflect historical costs rather than current market values. Inflation and depreciation have caused the values of many assets that were purchased in the past to be seriously understat- ed. Therefore, if an old hospital that had acquired much of its plant and equipment years ago is compared to a new hospital with the same physical capacity, the old hospital, because of a much lower book value of fixed as- sets, would report a much higher turnover ratio. This difference in fixed asset turnover is more reflective of the inability of financial statements to deal with inflation than of any inefficiency on the part of the new hospi- tals managers." (Gapenski,2012)

d.)It has lower expenses.