MSC Industrial Direct Company Inc (MSM)
Fixed asset turnover
| Sep 2, 2023 | Sep 3, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,986,180 | 3,683,500 | 3,228,150 | 3,174,920 | 3,363,820 |
| Property, plant and equipment | US$ in thousands | 319,660 | 286,666 | 298,416 | 301,979 | 310,854 |
| Fixed asset turnover | 12.47 | 12.85 | 10.82 | 10.51 | 10.82 |
September 2, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $3,986,180K ÷ $319,660K
= 12.47
The fixed asset turnover ratio is a measure of how efficiently a company utilizes its fixed assets to generate sales. It indicates the amount of sales generated for each dollar of fixed assets.
Analyzing the fixed asset turnover ratios of MSC Industrial Direct Co., Inc. over the past five years, we observe a consistent and relatively high level of efficiency in utilizing its fixed assets to generate sales. The trend shows that the company has been effectively utilizing its fixed assets to drive revenue.
The fixed asset turnover ratio has remained above 10 for the past five years, indicating that, on average, the company generates more than $10 in sales for every dollar invested in fixed assets. This suggests that MSC Industrial Direct Co., Inc. has been successful in optimizing the use of its property, plant, and equipment to drive its sales revenue.
The slight fluctuations in the fixed asset turnover ratio over the years could be a result of changes in sales relative to the investment in fixed assets. However, the overall trend indicates a consistently high level of efficiency in utilizing fixed assets to generate revenue.
In conclusion, the trend in MSC Industrial Direct Co., Inc.'s fixed asset turnover ratio reflects a strong and consistent ability to leverage its fixed assets effectively to drive sales. This efficiency in asset utilization is a positive indicator of the company's operational management and resource allocation strategies.
Peer comparison
Sep 2, 2023