Leggett & Platt Incorporated (LEG)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,632,700 | 5,203,900 | 5,133,700 | 4,329,000 | 4,813,000 |
| Property, plant and equipment | US$ in thousands | 781,200 | 772,400 | 781,500 | 784,800 | 830,800 |
| Fixed asset turnover | 5.93 | 6.74 | 6.57 | 5.52 | 5.79 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $4,632,700K ÷ $781,200K
= 5.93
The fixed asset turnover ratio measures the efficiency with which Leggett & Platt, Inc. utilizes its fixed assets to generate sales revenue. A higher fixed asset turnover indicates that the company is generating more revenue per dollar invested in fixed assets.
Analyzing the trend in Leggett & Platt, Inc.'s fixed asset turnover over the past five years, it can be observed that the ratio has generally been increasing from 2019 to 2022, reflecting improved efficiency in utilizing fixed assets to generate sales. The significant increase from 2019 to 2022 indicates a positive trend in asset management efficiency.
However, in 2023, there was a slight decrease in the fixed asset turnover ratio compared to 2022, although it still remains relatively high at 6.05. This could indicate either a decrease in sales or an increase in the value of fixed assets. Further investigation would be needed to determine the specific cause of this change.
Overall, Leggett & Platt, Inc. has shown a strong performance in utilizing its fixed assets efficiently to generate sales revenue, with the ratio consistently above 5 over the past five years. This indicates effective management of fixed assets and a potential for continued success in optimizing asset utilization for revenue generation.
Peer comparison
Dec 31, 2023