WW Grainger Inc (GWW)
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 | 16,387,000 | 16,192,000 | 15,923,000 | 15,580,000 | 15,137,000 | 14,695,000 | 14,128,000 | 13,498,000 | 12,937,000 | 12,539,000 | 12,184,000 | 11,808,000 | 11,725,000 | 11,631,000 | 11,562,000 | 11,624,000 | 11,422,000 | 11,338,000 | 11,221,080 | 11,187,370 |
| Property, plant and equipment | US$ in thousands | 1,658,000 | 1,543,000 | 1,485,000 | 1,468,000 | 1,461,000 | 1,409,000 | 1,438,000 | 1,434,000 | 1,424,000 | 1,429,000 | 1,436,000 | 1,441,000 | 1,395,000 | 1,394,000 | 1,365,000 | 1,357,000 | 1,400,000 | 1,384,000 | 1,380,000 | 1,358,000 |
| Fixed asset turnover | 9.88 | 10.49 | 10.72 | 10.61 | 10.36 | 10.43 | 9.82 | 9.41 | 9.08 | 8.77 | 8.48 | 8.19 | 8.41 | 8.34 | 8.47 | 8.57 | 8.16 | 8.19 | 8.13 | 8.24 |
December 31, 2023 calculation
Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $16,387,000K ÷ $1,658,000K
= 9.88
The fixed asset turnover ratio for W.W. Grainger Inc. has been consistently high over the past eight quarters, ranging from 9.47 to 10.79. This indicates that the company generates significant sales revenue relative to its investment in fixed assets. A higher fixed asset turnover ratio suggests that the company efficiently utilizes its fixed assets to generate sales.
The trend of increasing fixed asset turnover from Q1 2022 to Q3 2023 reflects improved efficiency in utilizing fixed assets to generate revenue. This could be attributed to effective management of its asset base and operational efficiency within the company. However, the slight dip in Q4 2023 compared to the previous quarter may suggest a potential slowdown in asset utilization efficiency.
In conclusion, W.W. Grainger Inc. has shown strong performance in generating sales from its fixed assets, indicating effective asset management and operational efficiency. Monitoring this ratio over time can provide insights into the company's ability to generate revenue from its fixed assets and improve operational performance.