Papa John's International Inc (PZZA)
Fixed asset turnover
Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
---|---|---|---|---|---|---|
Revenue | US$ in thousands | 2,145,070 | 2,088,400 | 2,068,420 | 1,813,230 | 1,619,250 |
Property, plant and equipment | US$ in thousands | 282,812 | 249,793 | 223,856 | 200,895 | 211,741 |
Fixed asset turnover | 7.58 | 8.36 | 9.24 | 9.03 | 7.65 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $2,145,070K ÷ $282,812K
= 7.58
Papa John's International, Inc. has exhibited varying trends in its fixed asset turnover ratio over the past five years. The fixed asset turnover ratio measures the efficiency at which the company generates sales revenue relative to its investment in fixed assets.
The ratio has decreased from 9.24 in 2021 to 7.55 in 2023, indicating a decline in the company's ability to generate sales from its fixed assets. This decrease may suggest that Papa John's is not effectively utilizing its fixed assets to drive revenue growth.
Despite the decrease in 2023, the company's fixed asset turnover ratio remains relatively high compared to previous years, with ratios consistently above 7 over the five-year period. This could imply that Papa John's has historically been efficient in utilizing its fixed assets to generate sales.
However, the downward trend in the fixed asset turnover ratio raises concerns about whether Papa John's is efficiently managing its fixed assets to maximize revenue generation. Further analysis of the company's asset management efficiency and strategies to improve the utilization of fixed assets may be warranted to enhance overall operational performance.
Peer comparison
Dec 31, 2023