nVent Electric PLC (NVT)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,195,600 | 2,877,800 | 2,414,500 | 1,962,200 | 2,159,300 |
| Property, plant and equipment | US$ in thousands | 390,000 | 289,200 | 291,100 | 289,400 | 284,500 |
| Fixed asset turnover | 8.19 | 9.95 | 8.29 | 6.78 | 7.59 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $3,195,600K ÷ $390,000K
= 8.19
nVent Electric plc's fixed asset turnover ratio measures how efficiently the company generates sales revenue from its investment in fixed assets. The trend over the past five years indicates fluctuations in the efficiency of utilizing fixed assets to generate sales revenue.
In 2023, the fixed asset turnover ratio decreased to 8.37, representing a decline in efficiency compared to the previous year. This may suggest that the company was less effective in generating sales from its fixed assets in the most recent fiscal period.
In 2022, the ratio was relatively high at 10.06, indicating that nVent Electric plc was very efficient in utilizing its fixed assets to generate sales revenue. This implies that the company was able to generate a higher level of sales for each unit of fixed assets invested during that year.
The ratio was also relatively high in 2021 at 8.46, showing a similar level of efficiency as in 2023. However, it dropped from the peak in 2022, indicating a slight decline in asset utilization efficiency.
In 2020, the fixed asset turnover ratio was 6.91, suggesting a decrease in efficiency compared to the previous year. This may indicate that nVent Electric plc was less effective in generating sales from its fixed assets in 2020.
In 2019, the company had a fixed asset turnover ratio of 7.75, reflecting a moderate level of efficiency in utilizing fixed assets to generate sales. This ratio was relatively stable compared to the fluctuations observed in the subsequent years.
Overall, nVent Electric plc's fixed asset turnover ratio has exhibited variability over the past five years, with some years showing higher efficiency in generating sales from fixed assets than others. It is important for the company to continuously monitor and improve its asset utilization to enhance operational efficiency and profitability.
Peer comparison
Dec 31, 2023