Chesapeake Utilities Corporation (CPK)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 670,604 | 680,704 | 569,968 | 488,198 | 479,605 |
| Property, plant and equipment | US$ in thousands | 2,456,370 | 1,810,470 | 1,744,880 | 1,601,180 | 1,463,800 |
| Fixed asset turnover | 0.27 | 0.38 | 0.33 | 0.30 | 0.33 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $670,604K ÷ $2,456,370K
= 0.27
The fixed asset turnover ratio for Chesapeake Utilities Corp has shown fluctuations over the past five years. The ratio decreased from 0.33 in 2019 to 0.30 in 2020 before slightly improving to 0.33 again in 2021. However, there was a significant drop in 2022 to 0.38, followed by a further decrease to 0.27 in 2023.
A lower fixed asset turnover ratio indicates that the company is generating fewer sales relative to its investment in fixed assets. This could imply inefficiencies in asset utilization or operational issues. The declining trend in the fixed asset turnover ratio may raise concerns about the company's ability to effectively generate revenue from its fixed assets.
It would be important for Chesapeake Utilities Corp to investigate the underlying reasons for the fluctuating fixed asset turnover ratio and take steps to improve asset efficiency and revenue generation going forward.
Peer comparison
Dec 31, 2023