Floor & Decor Holdings Inc (FND)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,406,710 | 4,256,060 | 3,431,300 | 2,421,130 | 2,039,070 |
| Property, plant and equipment | US$ in thousands | 1,629,920 | 1,258,060 | 929,083 | 579,359 | 456,289 |
| Fixed asset turnover | 2.70 | 3.38 | 3.69 | 4.18 | 4.47 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $4,406,710K ÷ $1,629,920K
= 2.70
Floor & Decor Holdings Inc's fixed asset turnover has been declining over the past five years, moving from 4.47 in 2019 to 2.70 in 2023. This decreasing trend indicates that the company is generating fewer sales relative to its investment in fixed assets. A lower fixed asset turnover may suggest inefficiency in utilizing its fixed assets to generate revenue.
The decreasing trend in fixed asset turnover could be a cause for concern as it may indicate potential issues with asset management, such as underutilization of assets or overinvestment in fixed assets relative to sales. It could also signify declining sales growth or pricing pressures that are impacting the company's ability to generate revenue efficiently from its fixed assets.
Management should closely monitor the fixed asset turnover ratio and investigate the underlying reasons for the declining trend. They may need to reassess their asset management strategies and consider optimizing the utilization of fixed assets to improve efficiency and profitability.
Peer comparison
Dec 31, 2023