The Gap, Inc. (GAP)
Fixed asset turnover
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 14,889,000 | 15,616,000 | 16,670,000 | 13,800,000 | 16,383,000 |
| Property, plant and equipment | US$ in thousands | 2,566,000 | 2,688,000 | 3,037,000 | 2,841,000 | 3,122,000 |
| Fixed asset turnover | 5.80 | 5.81 | 5.49 | 4.86 | 5.25 |
February 3, 2024 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $14,889,000K ÷ $2,566,000K
= 5.80
The fixed asset turnover ratio is a key financial metric used to assess a company's ability to generate sales revenue relative to its investment in fixed assets. The calculation involves dividing net sales by average fixed assets.
In the case of The Gap, Inc., the trend in the fixed asset turnover ratio over the past five years can be observed as follows:
- For the fiscal year ending February 3, 2024, the fixed asset turnover ratio stands at 5.80.
- For the fiscal year ending January 28, 2023, the ratio was slightly higher at 5.81.
- In the fiscal year ending January 29, 2022, the ratio was 5.49.
- For the fiscal year ending January 30, 2021, the ratio decreased to 4.86.
- In the fiscal year ending February 1, 2020, the ratio was 5.25.
The fluctuations in the fixed asset turnover ratio over the years may indicate changing efficiencies in how The Gap, Inc. utilizes its fixed assets to generate sales. A higher fixed asset turnover ratio typically suggests that the company is effectively utilizing its fixed assets to generate sales. On the other hand, a declining ratio may indicate inefficiencies or underutilization of fixed assets.
It is important to further analyze the factors influencing these fluctuations in the fixed asset turnover ratio, such as changes in sales volume, asset management strategies, investment in new fixed assets, or changes in the nature of the company's business operations. Additionally, comparisons with industry peers and historical performance can provide valuable insights into the company's operational efficiency and potential areas for improvement.
Peer comparison
Feb 3, 2024