FedEx Corporation (FDX)
Fixed asset turnover
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 86,948,000 | 89,461,000 | 92,823,000 | 82,773,000 | 68,545,000 |
| Property, plant and equipment | US$ in thousands | 41,491,000 | 40,698,000 | 38,091,000 | 35,752,000 | 33,608,000 |
| Fixed asset turnover | 2.10 | 2.20 | 2.44 | 2.32 | 2.04 |
May 31, 2024 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $86,948,000K ÷ $41,491,000K
= 2.10
Fixed asset turnover measures how efficiently a company generates sales from its fixed assets. In the case of FedEx Corporation, the trend in fixed asset turnover over the past five years has been fluctuating.
In May 2020, the fixed asset turnover was 2.04, indicating that the company generated $2.04 in revenue for every dollar invested in fixed assets. This ratio then improved to 2.32 in May 2021, suggesting an increase in efficiency in utilizing its fixed assets to generate sales.
However, in the following years, the fixed asset turnover ratio slightly decreased. In May 2022, it reached its peak at 2.44, showing that the company was very efficient in leveraging its fixed assets for sales generation. The ratio then decreased to 2.20 in May 2023 and further to 2.10 in May 2024.
Overall, while the fixed asset turnover ratio has shown some fluctuations, the general trend indicates that FedEx Corporation has been able to effectively utilize its fixed assets to generate revenue, with some variability in efficiency over the years. It is important for the company to monitor and manage this ratio to ensure optimal utilization of fixed assets in driving sales growth.