Insteel Industries Inc (IIIN)
Fixed asset turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 649,188 | 826,832 | 590,601 | 472,618 | 455,713 |
| Property, plant and equipment | US$ in thousands | 120,014 | 108,156 | 105,624 | 101,392 | 104,960 |
| Fixed asset turnover | 5.41 | 7.64 | 5.59 | 4.66 | 4.34 |
September 30, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $649,188K ÷ $120,014K
= 5.41
The fixed asset turnover ratio measures the efficiency of a company in generating sales from its investment in fixed assets. A higher ratio indicates better utilization of fixed assets to generate sales revenue.
In the case of Insteel Industries, Inc., the fixed asset turnover has fluctuated over the past five years, ranging from 4.34 to 7.64. The ratio was at its highest in October 2022, indicating that the company generated $7.64 in sales for every dollar invested in fixed assets at that time. This suggests efficient utilization of fixed assets to generate revenue.
However, the ratio decreased to 5.41 in September 2023, indicating a decrease in efficiency in generating sales from fixed assets compared to the previous year. It is important to consider the reasons behind this decline, such as changes in business operations, capital investments, or sales performance.
It's also worth noting that the fixed asset turnover ratio is industry-specific, and comparisons with industry averages or competitors' ratios can provide further insights into Insteel Industries' efficiency in utilizing its fixed assets. Additionally, trends in the ratio over time can reveal the company's ability to improve operational efficiency and optimize the use of its fixed assets to drive sales.
Peer comparison
Sep 30, 2023