Deluxe Corporation (DLX)
Total asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,192,260 | 2,238,010 | 2,022,200 | 1,790,780 | 2,008,720 |
| Total assets | US$ in thousands | 3,080,620 | 3,076,520 | 3,074,380 | 1,842,180 | 1,943,310 |
| Total asset turnover | 0.71 | 0.73 | 0.66 | 0.97 | 1.03 |
December 31, 2023 calculation
Total asset turnover = Revenue ÷ Total assets
= $2,192,260K ÷ $3,080,620K
= 0.71
Deluxe Corp.'s total asset turnover has fluctuated over the past five years, ranging from 0.66 to 1.03. A total asset turnover below 1 suggests that the company is generating less in revenue compared to its total assets, indicating inefficient use of assets in generating sales. This could be due to various factors such as underutilization of assets or ineffective management of inventory.
The decrease in total asset turnover from 1.03 in 2019 to 0.71 in 2023 indicates a decline in the company's efficiency in utilizing its assets to generate sales. This could be a red flag for investors and stakeholders as it suggests a weakening ability to generate revenue from its asset base.
It is essential for Deluxe Corp. to closely analyze the reasons behind this decrease and take corrective actions to improve its asset turnover ratio. Implementing more effective asset management strategies, optimizing inventory levels, and increasing sales could help the company enhance its overall financial performance and efficiency in the long run.