Callaway Golf Company (MODG)
Fixed asset turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,259,500 | 4,100,200 | 3,879,900 | 3,049,960 | 1,551,060 |
| Property, plant and equipment | US$ in thousands | 2,219,000 | 2,156,500 | 1,809,600 | 1,451,400 | 146,495 |
| Fixed asset turnover | 1.92 | 1.90 | 2.14 | 2.10 | 10.59 |
December 31, 2024 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $4,259,500K ÷ $2,219,000K
= 1.92
The fixed asset turnover ratio measures how efficiently a company generates sales revenue from its investment in fixed assets. For Callaway Golf Company, the fixed asset turnover has shown a notable decline from 10.59 in 2020 to 1.92 in 2024. This trend indicates that the company's ability to generate sales from its fixed assets has decreased significantly over the past five years.
A high fixed asset turnover ratio typically signifies efficient utilization of fixed assets to generate sales, whereas a decreasing ratio may suggest that the company is not effectively utilizing its fixed assets to drive revenue. In Callaway Golf Company's case, the declining trend in fixed asset turnover raises concerns about the company's operational efficiency and asset management strategies.
It is essential for Callaway Golf Company to address the declining fixed asset turnover ratio by implementing strategies to optimize the utilization of its fixed assets and improve overall operational efficiency. This could involve reassessing asset investments, enhancing production processes, or making strategic adjustments to improve revenue generation from fixed assets. By taking proactive measures to improve the fixed asset turnover ratio, Callaway Golf Company can enhance its financial performance and drive sustainable growth in the long term.
Peer comparison
Dec 31, 2024