ABM Industries Incorporated (ABM)
Total asset turnover
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 8,014,100 | 7,765,500 | 6,200,000 | 5,943,000 | 6,447,500 |
| Total assets | US$ in thousands | 4,933,700 | 4,868,900 | 4,436,200 | 3,776,900 | 3,692,600 |
| Total asset turnover | 1.62 | 1.59 | 1.40 | 1.57 | 1.75 |
October 31, 2023 calculation
Total asset turnover = Revenue ÷ Total assets
= $8,014,100K ÷ $4,933,700K
= 1.62
The total asset turnover ratio measures a company's efficiency in generating sales from its total assets. It is calculated by dividing the total revenue by the average total assets. A higher total asset turnover indicates that the company is using its assets more efficiently to generate sales.
Looking at the trend of ABM Industries Inc.'s total asset turnover ratio from 2019 to 2023, we can observe fluctuations in the ratio. In 2019, the total asset turnover stood at 1.76, which indicates that the company generated $1.76 in sales for every dollar of total assets. However, this ratio decreased to 1.59 in 2020, signaling a slight decrease in asset efficiency.
The ratio then experienced a notable increase in 2021 to 1.40, before rising again to 1.60 in 2022 and further to 1.64 in 2023. These increases indicate that the company managed to improve its efficiency in utilizing its total assets to generate sales over the past two years.
The rise in the total asset turnover ratio can signify various factors such as improved sales volume, better inventory management, or more efficient utilization of fixed assets. It demonstrates the company's ability to generate sales without requiring a substantial increase in assets, which can lead to higher profitability and better return on investment.
Overall, the trend in ABM Industries Inc.'s total asset turnover ratio reflects fluctuations but generally indicates an improving efficiency in utilizing its assets to generate sales, which is a positive sign for the company's operational performance.
Peer comparison
Oct 31, 2023