McCormick & Company Incorporated (MKC)
Fixed asset turnover
| Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 6,662,200 | 6,350,500 | 6,317,900 | 5,601,300 | 5,347,400 |
| Property, plant and equipment | US$ in thousands | 1,324,700 | 1,198,000 | 1,140,300 | 1,028,400 | 952,600 |
| Fixed asset turnover | 5.03 | 5.30 | 5.54 | 5.45 | 5.61 |
November 30, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $6,662,200K ÷ $1,324,700K
= 5.03
The fixed asset turnover ratio measures how efficiently a company is using its fixed assets to generate sales. A higher ratio suggests better asset utilization.
McCormick & Co., Inc.'s fixed asset turnover has been consistently high over the past five years, ranging between 5.03 and 5.61. This indicates that the company has efficiently utilized its fixed assets to generate sales, reflecting strong operational efficiency and effective management of its property, plants, and equipment.
The slight decline in the fixed asset turnover ratio from 5.61 in 2019 to 5.03 in 2023 may indicate a decrease in the company's ability to generate sales relative to its investment in fixed assets. However, it is important to assess this trend in conjunction with other profitability and efficiency metrics to gain a more comprehensive understanding of the company's overall performance.