RPM International Inc (RPM)
Fixed asset turnover
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 7,372,640 | 7,335,280 | 7,256,410 | 6,707,730 | 6,106,290 |
| Property, plant and equipment | US$ in thousands | 1,843,800 | 1,662,620 | 1,239,480 | 1,103,980 | 1,266,010 |
| Fixed asset turnover | 4.00 | 4.41 | 5.85 | 6.08 | 4.82 |
May 31, 2025 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $7,372,640K ÷ $1,843,800K
= 4.00
The fixed asset turnover ratio for RPM International Inc. demonstrates notable fluctuations over the period from May 31, 2021, to May 31, 2025. In May 2021, the ratio stood at 4.82, indicating the number of sales generated per dollar invested in fixed assets at that time. By May 31, 2022, the ratio increased significantly to 6.08, reflecting an improved efficiency in utilizing fixed assets to generate revenue.
However, this upward trend was not sustained, as the ratio declined to 5.85 by May 31, 2023. The reduction suggests a slight decrease in the effectiveness of fixed assets in producing sales, possibly due to capital investments not yet fully contributing to revenue, or operational factors impacting asset utilization. The downward momentum continued more markedly in the subsequent year, with the ratio falling to 4.41 by May 31, 2024, and further decreasing to 4.00 by May 31, 2025.
This overall decline over the analyzed period indicates a trend of decreasing efficiency in the utilization of fixed assets in generating sales. The ratio's peak at 6.08 in 2022 suggests that, during that period, RPM effectively leveraged its fixed asset base for revenue generation. Conversely, the subsequent decline could be due to factors such as aging assets, increased capital expenditures without immediate corresponding sales growth, or operational inefficiencies.
In summary, the fixed asset turnover ratio reveals a peak followed by a persistent downward trend, which warrants further analysis into asset management practices, asset aging, or capital investment strategies to understand the underlying causes of this decline and to assess implications for the company's operational efficiency.
Peer comparison
May 31, 2025