Equifax Inc (EFX)
Fixed asset turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 5,020,200 | 4,899,200 | 4,840,100 | 4,858,300 | 4,937,400 | 5,007,900 | 4,998,600 | 4,923,400 | 4,775,900 | 4,682,300 | 4,525,300 | 4,271,600 | 4,022,800 | 3,810,100 | 3,626,900 | 3,533,100 | 3,425,300 | 3,354,800 | 3,314,600 | 3,312,700 |
| Property, plant and equipment | US$ in thousands | 1,834,000 | 1,763,600 | 1,722,000 | 1,654,500 | 1,587,000 | 1,487,000 | 1,433,900 | 1,383,300 | 1,315,900 | 1,252,900 | 1,215,600 | 1,174,800 | 1,139,400 | 1,070,600 | 1,017,200 | 962,100 | 947,600 | 904,500 | 872,500 | 818,100 |
| Fixed asset turnover | 2.74 | 2.78 | 2.81 | 2.94 | 3.11 | 3.37 | 3.49 | 3.56 | 3.63 | 3.74 | 3.72 | 3.64 | 3.53 | 3.56 | 3.57 | 3.67 | 3.61 | 3.71 | 3.80 | 4.05 |
December 31, 2023 calculation
Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $5,020,200K ÷ $1,834,000K
= 2.74
Equifax, Inc.'s fixed asset turnover ratio has shown a declining trend over the past eight quarters, indicating that the company is generating less revenue relative to its investment in fixed assets. The ratio decreased from 3.67 in Q1 2022 to 2.87 in Q4 2023. This suggests that Equifax is becoming less efficient in utilizing its fixed assets to generate sales.
A fixed asset turnover ratio below 1 can indicate inefficiency in asset utilization, while a high ratio signifies that the company is effectively using its fixed assets to generate revenue. In this case, Equifax's decreasing trend in fixed asset turnover may raise concerns about the company's operational efficiency.
A potential explanation for this decline could be related to changes in the company's fixed asset base, such as outdated equipment or underutilization of assets. It may also indicate pricing pressures, declining demand for Equifax's services, or inefficiencies in production processes.
Overall, Equifax, Inc. should closely monitor its fixed asset turnover ratio and investigate the root causes of the decreasing trend to identify areas for improvement and enhance operational efficiency in the future.