Stepan Company (SCL)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,306,120 | 2,759,510 | 2,339,460 | 1,863,540 | 1,847,220 |
| Property, plant and equipment | US$ in thousands | 1,206,660 | 1,073,300 | 850,604 | 682,667 | 639,317 |
| Fixed asset turnover | 1.91 | 2.57 | 2.75 | 2.73 | 2.89 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $2,306,120K ÷ $1,206,660K
= 1.91
The fixed asset turnover ratio for Stepan Co. has exhibited a declining trend over the past five years, dropping from 2.91 in 2019 to 1.93 in 2023. This indicates that the company is generating less revenue from its fixed assets in more recent years. A lower fixed asset turnover ratio may suggest inefficiencies in the utilization of fixed assets or a decrease in sales relative to the book value of fixed assets. It is important for the company to investigate the reasons behind this decline and take necessary actions to improve the efficiency of its fixed asset utilization in order to optimize revenue generation.
Peer comparison
Dec 31, 2023