A ratio that analysts use to gauge the efficiency with which management is using its invested capital

is the fixed asset turnover ratio. The ratio is defined as:

Fixed asset turnover $=\frac{\text{N}\text{e}\text{t}\text{s}\text{a}\text{l}\text{e}\text{s}}{\text{A}\text{v}\text{e}\text{r}\text{a}\text{g}\text{e}\text{n}\text{e}\text{t}\text{P}\text{P}\text{E}}$

Palfinger AG$-$Property, Plant, & Equipment

Use the table below to determine the fixed asset turnover ratios for fiscal $2006$ and $2007$ for Palfinger

and Caterpillar. Explain what this ratio measures. Comment on the trends over time and levels across

companies.

Palfinger $($ thousands$)$

$2007$

Sales or revenue

Average net PPE

PPE turnover