CarMax Inc (KMX)
Fixed asset turnover
| Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 26,536,000 | 29,684,900 | 31,900,400 | 18,950,100 | 20,320,000 |
| Property, plant and equipment | US$ in thousands | 3,665,530 | 3,430,910 | 3,209,070 | 3,055,560 | 3,069,100 |
| Fixed asset turnover | 7.24 | 8.65 | 9.94 | 6.20 | 6.62 |
February 29, 2024 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $26,536,000K ÷ $3,665,530K
= 7.24
The fixed asset turnover ratio measures how effectively a company generates sales revenue from its investment in fixed assets. A higher ratio indicates better utilization of fixed assets to generate sales.
Analyzing CarMax Inc's fixed asset turnover over the past five years, we observe fluctuations in the ratio. In 2024, the ratio stands at 7.24, a decrease from the previous year's ratio of 8.65. This decline suggests that CarMax Inc is generating $7.24 in sales for every dollar invested in fixed assets, indicating a potential decrease in efficiency in utilizing fixed assets to generate revenue compared to the prior year.
Comparing the current ratio to the data from 2022 and 2021, where the ratios were 9.94 and 6.20 respectively, we see variations in performance over the years. The significant increase from 2021 to 2022 suggests improved efficiency in generating sales from fixed assets, followed by a slight decline in 2024.
Furthermore, comparing the current ratio to that of 2020 at 6.62, we notice a relatively higher efficiency in utilizing fixed assets in 2024, despite the decrease from the preceding year.
In summary, the trend of CarMax Inc's fixed asset turnover ratio reflects fluctuations in the company's ability to efficiently generate sales revenue from its fixed assets over the past five years, with the current ratio indicating a moderate decline in asset utilization efficiency compared to the prior year.
Peer comparison
Feb 29, 2024