Calavo Growers Inc (CVGW)
Fixed asset turnover
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 967,829 | 1,188,450 | 1,063,150 | 1,022,360 | 1,197,400 |
| Property, plant and equipment | US$ in thousands | 105,952 | 107,589 | 111,373 | 123,440 | 132,098 |
| Fixed asset turnover | 9.13 | 11.05 | 9.55 | 8.28 | 9.06 |
October 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $967,829K ÷ $105,952K
= 9.13
The fixed asset turnover ratio measures a company's ability to generate sales from its investment in fixed assets, such as property, plant, and equipment. Calavo Growers, Inc's fixed asset turnover has fluctuated over the past five years, ranging from 8.13 to 10.51.
The declining trend from 10.51 in 2022 to 8.62 in 2023 suggests that the company's efficiency in utilizing its fixed assets to generate sales has decreased. This may indicate that the company's investment in fixed assets has not resulted in a proportional increase in revenue generation.
However, it is important to consider the nature of Calavo Growers' industry and business operations when interpreting this ratio. For instance, the company may have made significant investments in fixed assets to support its growth and expansion, which could have temporarily impacted the ratio.
Further analysis of the company's financial and operational performance, as well as comparisons with industry benchmarks, would provide a more comprehensive understanding of the implications of the fixed asset turnover ratio for Calavo Growers, Inc.