Ironwood Pharmaceuticals Inc (IRWD)

Fixed asset turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	421,125	403,178	381,332	353,446	366,965
Property, plant and equipment	US$ in thousands	5,585	6,288	7,575	8,929	12,429
Fixed asset turnover		75.40	64.12	50.34	39.58	29.52

December 31, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $421,125K ÷ $5,585K
= 75.40

Ironwood Pharmaceuticals Inc's fixed asset turnover has shown a consistent upward trend over the past five years, indicating improved efficiency in generating sales revenue from its fixed assets. The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate sales. The significant increase from 34.47 in 2019 to 79.27 in 2023 reflects a substantial enhancement in asset utilization efficiency.

This improvement suggests that Ironwood Pharmaceuticals has been able to generate more sales revenue per dollar invested in fixed assets. A higher fixed asset turnover ratio is generally favorable as it indicates that the company is utilizing its assets more effectively to drive sales.

Overall, the increasing trend in Ironwood Pharmaceuticals Inc's fixed asset turnover ratio signifies improved efficiency and effectiveness in utilizing its fixed assets over the years, which can positively impact its overall financial performance and profitability.