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