There isn't a universal notion of when an expression is “fully simplified,” but you generally want to have a simple fraction (not a complex one, where numerator or denominator are themselves functions). In this expression I would also try to combine all the square roots into a single radical, and put that radical in the numerator.
First, make the fraction simple:
$$
\frac{\sqrt{2} x^3}{\sqrt{32/x^2}}
= \frac{\sqrt{2} x^3}{\sqrt{32}/\sqrt{x^2}}
= \frac{\sqrt{2}\sqrt{x^2} x^3}{\sqrt{32}}
$$
You are probably expected to simplify $\sqrt{x^2} = x$, although this is only true when $x\geq0$. You might want to ask your teacher if you are supposed to assume $x$ is positive.
Combining the $\sqrt{2}$ in the numerator with $\sqrt{32}$ in the denominator gives
$$
\frac{x^4}{\sqrt{16}} = \frac{x^4}{4}
$$