Cabot Corporation (CBT)
Fixed asset turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,931,000 | 4,321,000 | 3,409,000 | 2,614,000 | 3,337,000 |
| Property, plant and equipment | US$ in thousands | 1,412,000 | 1,270,000 | 1,376,000 | 1,314,000 | 1,348,000 |
| Fixed asset turnover | 2.78 | 3.40 | 2.48 | 1.99 | 2.48 |
September 30, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $3,931,000K ÷ $1,412,000K
= 2.78
The fixed asset turnover ratio measures a company's ability to generate revenue from its investment in fixed assets. A higher ratio indicates that the company is more efficient in utilizing its fixed assets to generate sales.
In the case of Cabot Corp., the fixed asset turnover has shown some fluctuations over the past five years. In 2023, the fixed asset turnover ratio stands at 2.78, declining from 3.40 in 2022. This decrease may indicate a decrease in the company's efficiency in utilizing its fixed assets to generate revenue. However, it is essential to consider the industry benchmarks and the company's specific business cycle.
It is important to note that a declining fixed asset turnover ratio could be attributed to various factors, such as underutilization of assets, over-investment in fixed assets, or a decrease in sales. Conversely, an increasing ratio could suggest improved efficiency or increased sales relative to the investment in fixed assets.
Therefore, further analysis of the company's financial and operational performance is necessary to understand the drivers behind the fluctuations in the fixed asset turnover ratio and to assess the impact on the company's overall financial health and operational efficiency.
Peer comparison
Sep 30, 2023