Reliance Steel & Aluminum Co (RS)

Fixed asset turnover

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Revenue (ttm) US$ in thousands 14,805,900 15,095,900 15,714,200 16,509,200 17,025,000 17,403,100 17,003,300 15,740,800 14,093,300 12,238,900 10,477,000 9,078,600 8,811,900 9,146,800 9,742,300 10,597,400 10,974,000 11,271,800 11,580,900 11,710,000
Property, plant and equipment US$ in thousands 2,248,400 2,189,000 2,116,100 2,024,800 1,974,600 1,929,800 1,888,300 1,851,700 1,836,800 1,802,600 1,797,100 1,769,700 1,792,200 1,799,400 1,809,300 1,791,700 1,795,200 1,775,800 1,763,300 1,738,700
Fixed asset turnover 6.59 6.90 7.43 8.15 8.62 9.02 9.00 8.50 7.67 6.79 5.83 5.13 4.92 5.08 5.38 5.91 6.11 6.35 6.57 6.73

December 31, 2023 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $14,805,900K ÷ $2,248,400K
= 6.59

The fixed asset turnover ratio for Reliance Steel & Aluminum Co. has shown a consistent downward trend over the past eight quarters. The ratio decreased from 8.62 in Q4 2022 to 6.59 in Q4 2023. This downward trend indicates that the company is generating less revenue for every dollar of fixed assets it owns.

A high fixed asset turnover ratio is generally preferred as it signifies that a company is effectively utilizing its fixed assets to generate sales. However, the declining trend in Reliance Steel & Aluminum Co.'s fixed asset turnover may suggest inefficiencies in asset utilization or a decrease in sales relative to fixed assets.

The company's fixed asset turnover ratio ranged from a high of 9.02 in Q3 2022 to a low of 6.59 in Q4 2023. This may warrant further investigation into the company's asset management strategies and operational efficiency to identify areas for improvement.


Peer comparison

Dec 31, 2023

Company name
Symbol
Fixed asset turnover
Reliance Steel & Aluminum Co
RS
6.59
Olympic Steel Inc
ZEUS
11.60