MillerKnoll Inc (MLKN)
Fixed asset turnover
| Jun 3, 2023 | May 28, 2022 | May 29, 2021 | May 30, 2020 | Jun 1, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 8,100,200 | 7,841,800 | 4,916,300 | 4,960,700 | 5,122,300 |
| Property, plant and equipment | US$ in thousands | 536,300 | 581,500 | 327,200 | 330,800 | 348,600 |
| Fixed asset turnover | 15.10 | 13.49 | 15.03 | 15.00 | 14.69 |
June 3, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $8,100,200K ÷ $536,300K
= 15.10
The fixed asset turnover ratio measures the efficiency of a company in generating sales revenue from its investment in fixed assets, such as property, plant, and equipment. A higher fixed asset turnover ratio indicates that the company is using its fixed assets more efficiently to generate sales.
Looking at the trend of MillerKnoll Inc's fixed asset turnover ratio over the past five years, we observe that the ratio has remained consistently high, ranging from 6.79 to 7.62. This indicates that the company has been effectively utilizing its fixed assets to generate revenue during this time period.
The increase in the fixed asset turnover ratio from 6.79 in 2019 to 7.62 in 2023 suggests that MillerKnoll Inc has been able to improve the efficiency of its fixed asset utilization over the years. This could be due to either an increase in sales relative to fixed assets, a decrease in the value of fixed assets, or a combination of both factors.
Additionally, the relatively stable nature of the fixed asset turnover ratio over the past five years indicates consistency in the company's ability to generate sales from its investment in fixed assets. This stability may reflect a well-managed capital investment strategy and operational efficiency.
Overall, the consistently high and stable trend in MillerKnoll Inc's fixed asset turnover ratio suggests that the company has been effectively utilizing its fixed assets to generate sales revenue and may indicate a sound operational and capital investment strategy. However, further analysis and comparison with industry peers would provide a more comprehensive understanding of the company's performance in this area.