Arcosa Inc (ACA)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,307,900 | 2,242,800 | 2,036,400 | 1,935,600 | 1,736,900 |
| Property, plant and equipment | US$ in thousands | 1,336,300 | 1,199,600 | 1,201,900 | 913,300 | 816,200 |
| Fixed asset turnover | 1.73 | 1.87 | 1.69 | 2.12 | 2.13 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $2,307,900K ÷ $1,336,300K
= 1.73
Fixed asset turnover is a financial ratio that measures a company's efficiency in generating sales revenue from its investment in fixed assets. A higher fixed asset turnover indicates that the company is utilizing its fixed assets more efficiently to generate sales.
Analyzing Arcosa Inc's fixed asset turnover over the past five years, we observe a declining trend from 2.13 in 2019 to 1.73 in 2023. This suggests that the company's ability to generate sales from its fixed assets has decreased over this period.
The decrease in fixed asset turnover could be attributed to various factors such as slower sales growth relative to investments in fixed assets, inefficient utilization of fixed assets, or an increase in the carrying value of fixed assets without a proportionate increase in sales.
It is essential for Arcosa Inc management to delve deeper into the causes of the declining fixed asset turnover to identify opportunities for improvement, such as optimizing asset utilization, reducing underperforming assets, or implementing cost-effective strategies to enhance sales generated from fixed assets. Regular monitoring and analysis of fixed asset turnover are crucial for ensuring optimal asset efficiency and overall financial performance.
Peer comparison
Dec 31, 2023