Stepan Company (SCL)
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 | 2,306,119 | 2,409,124 | 2,565,319 | 2,735,064 | 2,759,510 | 2,746,863 | 2,632,121 | 2,477,612 | 2,339,459 | 2,223,132 | 2,085,032 | 1,950,387 | 1,863,537 | 1,821,473 | 1,808,473 | 1,819,863 | 1,859,078 | 1,880,747 | 1,936,514 | 2,504,002 |
| Property, plant and equipment | US$ in thousands | 1,206,660 | 1,179,970 | 1,165,780 | 1,120,130 | 1,073,300 | 977,600 | 919,534 | 892,581 | 850,604 | 799,396 | 764,784 | 746,379 | 682,667 | 651,686 | 634,004 | 627,542 | 639,317 | 611,279 | 609,208 | 605,360 |
| Fixed asset turnover | 1.91 | 2.04 | 2.20 | 2.44 | 2.57 | 2.81 | 2.86 | 2.78 | 2.75 | 2.78 | 2.73 | 2.61 | 2.73 | 2.80 | 2.85 | 2.90 | 2.91 | 3.08 | 3.18 | 4.14 |
December 31, 2023 calculation
Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $2,306,119K ÷ $1,206,660K
= 1.91
Fixed asset turnover is a financial ratio that measures a company's ability to generate sales revenue from its investment in fixed assets such as property, plant, and equipment.
Analyzing Stepan Co.'s fixed asset turnover over the past eight quarters reveals a declining trend. The ratio decreased from 2.58 in Q4 2022 to 1.93 in Q4 2023. This suggests that the company is generating less revenue per dollar invested in fixed assets.
Despite some fluctuations, the overall trend indicates a declining efficiency in utilizing its fixed assets to generate sales revenue. This could be a cause for concern as it may indicate inefficiencies in the company's operations or a need for increased investment in fixed assets to support revenue growth.
Further investigation into the company's operational efficiency and capital expenditure decisions may be warranted to understand the factors contributing to the declining fixed asset turnover and to determine appropriate strategic actions to address this issue.
Peer comparison
Dec 31, 2023