Insteel Industries Inc (IIIN)
Fixed asset turnover
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 529,198 | 649,188 | 826,832 | 590,601 | 472,618 |
| Property, plant and equipment | US$ in thousands | 125,540 | 120,014 | 108,156 | 105,624 | 101,392 |
| Fixed asset turnover | 4.22 | 5.41 | 7.64 | 5.59 | 4.66 |
September 30, 2024 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $529,198K ÷ $125,540K
= 4.22
Insteel Industries Inc's fixed asset turnover ratio has exhibited fluctuations over the past five years. The trend indicates the efficiency with which the company generates sales revenue from its investment in fixed assets. A higher fixed asset turnover ratio signifies better utilization of fixed assets to generate sales.
In 2022, the fixed asset turnover ratio was the highest at 7.64, indicating that the company generated $7.64 in sales for every dollar invested in fixed assets during that fiscal year. This suggests efficient asset utilization. The subsequent year, 2023, saw a decline in the ratio to 5.41, which was still relatively favorable compared to the industry average.
However, in 2024, there was a further decline to 4.22, indicating that the company may not have been as efficient in utilizing its fixed assets to generate sales revenue during that period. It is worth noting that fluctuations in the fixed asset turnover ratio could be due to various factors such as changes in production capacity, asset impairment, or changes in sales volume.
Overall, while the company's fixed asset turnover ratio has shown variability, it is essential for management to closely monitor this ratio to ensure optimal utilization of fixed assets and sustained efficiency in generating sales revenue.
Peer comparison
Sep 30, 2024