Encompass Health Corp (EHC)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,661,000 | 4,174,400 | 4,959,100 | 4,461,100 | 4,440,800 |
| Property, plant and equipment | US$ in thousands | 3,053,800 | 2,666,300 | 2,281,900 | 1,883,800 | 1,959,300 |
| Fixed asset turnover | 1.53 | 1.57 | 2.17 | 2.37 | 2.27 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $4,661,000K ÷ $3,053,800K
= 1.53
Over the past five years, Encompass Health Corp's fixed asset turnover ratio has exhibited a decreasing trend. The ratio decreased from 2.35 in 2019 to 1.45 in 2023. This indicates that the company generated $1.45 in revenue for every $1 invested in fixed assets at the end of 2023.
The declining trend in fixed asset turnover may suggest that Encompass Health Corp is becoming less efficient in generating sales from its fixed assets. A lower fixed asset turnover ratio could be a sign of underutilized assets or inefficient asset management within the company. This trend warrants further investigation into the company's operational efficiency and asset utilization strategies to identify potential areas for improvement.
Peer comparison
Dec 31, 2023