Lindsay Corporation (LNN)
Fixed asset turnover
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 674,084 | 770,743 | 567,646 | 474,692 | 444,072 |
| Property, plant and equipment | US$ in thousands | 99,681 | 94,472 | 91,997 | 79,581 | 68,968 |
| Fixed asset turnover | 6.76 | 8.16 | 6.17 | 5.96 | 6.44 |
August 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $674,084K ÷ $99,681K
= 6.76
The fixed asset turnover ratio measures the efficiency of a company in generating sales revenue from its investment in fixed assets. A higher fixed asset turnover ratio indicates that the company is effectively utilizing its fixed assets to generate sales.
Lindsay Corporation's fixed asset turnover has fluctuated over the past five years. In 2023, the ratio stands at 6.76, indicating that the company generated $6.76 in sales for every dollar invested in fixed assets. This represents a decrease from the previous year's ratio of 8.16.
The decline in the fixed asset turnover ratio may suggest decreased efficiency in utilizing fixed assets to generate sales. It could be due to an increase in fixed assets without a proportional increase in sales, or a decrease in sales relative to the level of fixed assets.
While a declining fixed asset turnover ratio can indicate inefficiency, it should be analyzed in conjunction with other financial metrics and contextual factors to provide a comprehensive assessment of the company's operational performance and asset management.
Peer comparison
Aug 31, 2023