RPM International Inc (RPM)
Fixed asset turnover
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 7,210,630 | 7,128,530 | 6,615,470 | 6,018,050 | 5,406,290 |
| Property, plant and equipment | US$ in thousands | 1,331,060 | 1,239,480 | 1,103,980 | 965,182 | 849,686 |
| Fixed asset turnover | 5.42 | 5.75 | 5.99 | 6.24 | 6.36 |
May 31, 2024 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $7,210,630K ÷ $1,331,060K
= 5.42
Fixed asset turnover is a financial ratio that indicates how efficiently a company is using its fixed assets to generate revenue. The higher the ratio, the better the company is utilizing its fixed assets to generate sales.
From the data provided, we can see that RPM International Inc's fixed asset turnover has been declining over the past five years. In May 2020, the fixed asset turnover ratio was 6.36, indicating that the company generated $6.36 in revenue for every $1 of fixed assets. However, this ratio has been decreasing consistently year over year, reaching 5.42 in May 2024.
This downward trend may indicate that the company's fixed assets are not being utilized as efficiently in generating sales compared to previous years. It could be due to various reasons such as underutilization of assets, aging equipment, or changes in the industry dynamics affecting demand for the company's products.
Management should closely monitor this trend and consider conducting a detailed analysis of the fixed asset utilization to identify any inefficiencies and take corrective actions to improve the fixed asset turnover ratio.
Peer comparison
May 31, 2024