The fixed assets turnover ratio measures the efficiency with which the firm is utilizing its investment in fixed assets, such as land, building, plant and machinery, furniture, etc. It also indicates the adequacy of sales in relation to investment in fixed assets. The fixed assets turnover ratio is sales divided by the net fixed assets (i.e., the depreciated value of fixed assets).
This concept is based on the accounting period concept. It is widely accepted that the desire of making a profit is the most important motivation to keep the proprietors engaged in business activities. Hence, a major share of the attention of the accountant is being devoted to evolving appropriate techniques for measuring profits. One such technique is periodic matching of costs and revenues.
Zero-based budgeting emerged in the late 1960s as a response to incremental budgeting. With zero-based budgeting, all budgets start at zero and activities/costs are only allowed if they are justified under investigation. All requests for resources must be presented and evaluated on the basis of cost-benefit. Zero-based budgeting is best suited to discretionary spending where there is no clearly defined input-output relationship such as in marketing, research and development, and training or public sector organization such as district councils.