Haynes International Inc (HAYN)
Fixed asset turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 581,578 | 487,791 | 336,228 | 379,029 | 488,561 |
| Property, plant and equipment | US$ in thousands | 137,310 | 137,129 | 141,030 | 153,316 | 169,966 |
| Fixed asset turnover | 4.24 | 3.56 | 2.38 | 2.47 | 2.87 |
September 30, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $581,578K ÷ $137,310K
= 4.24
The fixed asset turnover ratio measures a company's ability to generate sales revenue from its investment in fixed assets. A higher fixed asset turnover ratio indicates better utilization of fixed assets to generate sales. Here is a detailed analysis of Haynes International Inc.'s fixed asset turnover based on the provided data:
1. Trend Analysis:
- The fixed asset turnover ratio has shown an increasing trend over the past five years.
- In 2019, the ratio stood at 2.88 and decreased to 2.38 in 2020. However, it then increased to 2.29 in 2021, 3.44 in 2022, and further to 4.14 in 2023, reflecting a general improvement in the utilization of fixed assets to generate sales.
2. Efficiency in Asset Utilization:
- The ratio's consistent increase indicates that Haynes International Inc. has become more effective in generating sales from its fixed assets over the years.
- A fixed asset turnover of 4.14 in 2023 indicates that the company generated $4.14 in sales for every dollar invested in fixed assets, showcasing strong efficiency in asset utilization.
3. Comparison to Industry and Peers:
- It would be beneficial to compare Haynes International Inc.'s fixed asset turnover to industry and peer benchmarks to gauge the company's performance relative to its competitors.
- A ratio above the industry average or higher than key competitors' fixed asset turnover would suggest that Haynes International Inc. is effectively using its fixed assets to generate sales compared to its industry peers.
4. Potential Causes of Changes:
- A significant increase in the fixed asset turnover ratio could be attributed to operational improvements, cost-cutting measures, or better sales and production planning leading to more efficient use of fixed assets.
- It would be worthwhile to delve into the company's financial reports and operational activities for each year to identify specific factors driving changes in the fixed asset turnover ratio.
In conclusion, the steady improvement in Haynes International Inc.'s fixed asset turnover ratio signifies increased efficiency in utilizing fixed assets to generate sales. However, a more comprehensive analysis, including industry comparisons and underlying operational factors, is recommended to gain a deeper understanding of the company's performance.
Peer comparison
Sep 30, 2023