Hormel Foods Corporation (HRL)
Fixed asset turnover
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 12,036,600 | 12,389,600 | 11,339,200 | 9,585,600 | 9,496,530 |
| Property, plant and equipment | US$ in thousands | 2,127,820 | 2,095,580 | 2,055,680 | 1,837,160 | 1,629,110 |
| Fixed asset turnover | 5.66 | 5.91 | 5.52 | 5.22 | 5.83 |
October 29, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $12,036,600K ÷ $2,127,820K
= 5.66
The fixed asset turnover ratio for Hormel Foods Corp. has shown fluctuations over the past five years. The ratio indicates the effectiveness of the company in generating sales revenue from its fixed assets.
In 2023, the fixed asset turnover ratio decreased to 5.59 from the previous year's 5.82, suggesting a slight decrease in the company's efficiency in utilizing its fixed assets to generate sales. However, it is essential to consider the industry dynamics and specific business strategies that may have influenced this change.
In 2022, the ratio was 5.82, reflecting a higher efficiency in leveraging fixed assets to generate sales compared to the previous year. This suggests that the company was able to generate more sales revenue from its fixed assets in 2022.
In 2021, the fixed asset turnover ratio was 5.40, representing a moderate efficiency in utilizing fixed assets to generate sales. This figure was slightly lower than the previous year's ratio, indicating a slight decrease in efficiency.
The ratio in 2020 was 5.06, showing a decrease in efficiency compared to the previous year. This suggests that the company's sales revenue generated from fixed assets was lower in 2020.
In 2019, the fixed asset turnover ratio was 5.83, indicating a high level of efficiency in leveraging fixed assets to generate sales. This suggests that the company was highly effective in utilizing its fixed assets to generate sales revenue in 2019.
Overall, the fluctuations in the fixed asset turnover ratio over the past five years could be indicative of changes in the company's business operations, capital investments, or sales strategies, which would require further analysis to better understand the underlying factors contributing to these fluctuations.