Otter Tail Corporation (OTTR)

Fixed asset turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	1,329,970	1,353,480	1,469,480	1,197,640	883,171
Property, plant and equipment	US$ in thousands	178,676	142,430	2,212,720	2,124,600	2,049,270
Fixed asset turnover		7.44	9.50	0.66	0.56	0.43

December 31, 2024 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $1,329,970K ÷ $178,676K
= 7.44

The fixed asset turnover ratio measures how efficiently Otter Tail Corporation is utilizing its fixed assets to generate sales revenue. A higher ratio indicates better utilization of fixed assets.

From December 31, 2020, to December 31, 2021, there was an improvement in the company's fixed asset turnover ratio, increasing from 0.43 to 0.56. This indicates that Otter Tail Corporation became more efficient in generating sales revenue from its fixed assets.

The trend continued to improve over the following years, with the ratio reaching 0.66 on December 31, 2022, which signifies a further increase in the efficiency of asset utilization.

However, there was a significant spike in the fixed asset turnover ratio to 9.50 on December 31, 2023. This could be due to various factors such as a decrease in fixed assets or a substantial increase in sales revenue during that period.

On December 31, 2024, the fixed asset turnover ratio decreased to 7.44. While still a high value, it indicates a slight decline in asset efficiency compared to the previous year.

Overall, Otter Tail Corporation has shown improvements in utilizing its fixed assets efficiently to generate sales revenue, with some fluctuations in the ratio over the years. Further analysis would be required to understand the specific drivers behind these fluctuations.