Central Garden & Pet Company A (CENTA)
Fixed asset turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,310,080 | 3,338,590 | 3,303,680 | 2,695,510 | 2,383,000 |
| Property, plant and equipment | US$ in thousands | 391,768 | 396,979 | 328,571 | 244,667 | 245,405 |
| Fixed asset turnover | 8.45 | 8.41 | 10.05 | 11.02 | 9.71 |
September 30, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $3,310,080K ÷ $391,768K
= 8.45
The fixed asset turnover ratio for Central Garden & Pet Co. has been relatively stable over the past five years, with slight fluctuations. The ratio measures the company's ability to generate sales from its investment in fixed assets.
The ratio has gradually declined from 11.02 in 2020 to 8.45 in 2023, indicating that the company is generating less sales relative to its investment in fixed assets. This might be a cause for concern as it suggests a potential inefficiency in utilizing fixed assets to generate revenues.
The decrease in fixed asset turnover may signal that the company's investments in fixed assets are not being efficiently utilized to generate sales, which could potentially lead to reduced profitability. It would be important for the company to assess the efficiency of its operations and consider strategies to improve the utilization of its fixed assets.
Peer comparison
Sep 30, 2023