Meritage Corporation (MTH)

Fixed asset turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	6,113,010	6,298,150	5,147,330	4,506,300	3,677,840
Property, plant and equipment	US$ in thousands	48,953	38,635	37,340	38,933	50,606
Fixed asset turnover		124.88	163.02	137.85	115.74	72.68

December 31, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $6,113,010K ÷ $48,953K
= 124.88

The fixed asset turnover ratio measures how efficiently a company generates sales revenue from its investment in fixed assets. It indicates the company's ability to utilize its fixed assets to generate sales.

Based on the data provided:
- Meritage Homes Corp.'s fixed asset turnover has fluctuated over the past five years, with values ranging from 1.28 to 1.59.
- A higher fixed asset turnover ratio is generally favorable as it indicates that the company is generating more revenue relative to its investment in fixed assets.
- In 2020, the company achieved the highest fixed asset turnover ratio of 1.59, suggesting efficient utilization of fixed assets to generate sales.
- However, the ratio decreased in 2023 to 1.28, indicating a decrease in efficiency in utilizing fixed assets to generate sales compared to the previous year.

Overall, Meritage Homes Corp. should focus on effectively managing and utilizing its fixed assets to improve its fixed asset turnover ratio and enhance operational efficiency.