Stepan Company (SCL)
Total 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 |
| Total assets | US$ in thousands | 2,363,350 | 2,433,170 | 2,065,610 | 1,752,340 | 1,579,370 |
| Total asset turnover | 0.98 | 1.13 | 1.13 | 1.06 | 1.17 |
December 31, 2023 calculation
Total asset turnover = Revenue ÷ Total assets
= $2,306,120K ÷ $2,363,350K
= 0.98
Total asset turnover measures how efficiently Stepan Co. generates revenue from its total assets. A lower total asset turnover of 0.98 in 2023 compared to previous years may indicate a decline in the company's ability to generate sales relative to its asset base. This could be a result of slower sales growth, underutilized assets, or an increase in asset base without corresponding revenue growth.
The total asset turnover of 1.14 in 2022 and 2021 suggests that the company was able to generate $1.14 in revenue for every $1 of assets it had during those years. This indicates efficient asset utilization. The slight decline in asset turnover in 2023 could be a red flag and may require further investigation to determine the underlying reasons for the decrease.
In 2020 and 2019, Stepan Co. had total asset turnover ratios of 1.07 and 1.18, respectively. These figures indicate fluctuations in how effectively the company was able to generate sales from its total assets in those years. Overall, a consistent and stable total asset turnover ratio is desirable as it signifies optimal asset management and efficient operations.
Peer comparison
Dec 31, 2023