Neogen Corporation (NEOG)

Fixed asset turnover

		Nov 30, 2024	Aug 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019
Revenue (ttm)	US$ in thousands	1,792,485	1,780,298	1,817,638	1,800,899	1,778,001	1,592,370	1,401,365	1,227,465	1,062,406	1,054,318	901,557	761,778	730,744	692,784	674,433	757,462	743,068	727,266	727,954	723,616
Property, plant and equipment	US$ in thousands	310,552	300,971	272,282	244,300	221,090	198,749	164,888	148,170	121,021	110,584	104,699	100,863	99,515	100,453	97,981	83,774	80,593	78,671	78,394	77,150
Fixed asset turnover		5.77	5.92	6.68	7.37	8.04	8.01	8.50	8.28	8.78	9.53	8.61	7.55	7.34	6.90	6.88	9.04	9.22	9.24	9.29	9.38

November 30, 2024 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $1,792,485K ÷ $310,552K
= 5.77

Neogen Corporation's fixed asset turnover ratio fluctuated over the period analyzed. From November 30, 2019, to May 31, 2022, the company maintained a relatively high fixed asset turnover ranging from 9.24 to 9.53, indicating that Neogen efficiently generated revenue from its fixed assets. This high turnover ratio suggests effective utilization of fixed assets to generate sales.

However, a noticeable decline in the fixed asset turnover ratio was observed from February 28, 2022, to November 30, 2024, where the ratio decreased to a low of 5.77 on November 30, 2024. This declining trend may indicate a potential decrease in the company's sales generated from its fixed assets, raising concerns about the efficiency of Neogen's fixed asset utilization.

It is essential for Neogen Corporation to closely monitor and analyze the factors contributing to the decreasing trend in the fixed asset turnover ratio to identify any inefficiencies in asset management or changes in the company's operations that may impact revenue generation from fixed assets. By addressing these issues, Neogen can work towards improving its fixed asset turnover ratio and overall financial performance.