MP Materials Corp (MP)
Fixed asset turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 247,383 | 293,977 | 367,165 | 450,415 | 524,822 | 532,150 | 508,683 | 438,239 | 331,952 | 275,021 | 216,289 | 172,496 | 132,441 |
| Property, plant and equipment | US$ in thousands | 1,158,050 | 1,097,730 | 1,044,840 | 1,002,240 | 935,743 | 830,033 | 749,848 | 668,488 | 610,612 | 582,838 | 560,616 | 532,504 | 501,974 |
| Fixed asset turnover | 0.21 | 0.27 | 0.35 | 0.45 | 0.56 | 0.64 | 0.68 | 0.66 | 0.54 | 0.47 | 0.39 | 0.32 | 0.26 |
December 31, 2023 calculation
Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $247,383K ÷ $1,158,050K
= 0.21
MP Materials Corporation's fixed asset turnover has been exhibiting a declining trend over the past eight quarters, dropping from 0.66 in Q1 2022 to 0.22 in Q4 2023. This indicates that the company is generating less revenue relative to its fixed assets at a decreasing rate. A fixed asset turnover below 1 may suggest inefficiencies in asset utilization, as it shows that the company is not generating as much revenue per unit of fixed asset investment.
The decreasing trend in fixed asset turnover could be a cause for concern as it may indicate that the company's fixed assets are not being utilized effectively to generate sufficient revenue. It could also imply potential issues such as underutilization of assets, inefficient operations, or challenges in driving sales growth.
Management should closely monitor this trend and consider implementing strategies to improve asset utilization and efficiency, such as optimizing production processes, investing in technology or equipment upgrades, or exploring opportunities to boost sales and revenue generation from existing fixed assets. Regularly reviewing and addressing factors that may be contributing to the decline in fixed asset turnover will be crucial for the company to enhance its financial performance and long-term sustainability.
Peer comparison
Dec 31, 2023