Scotts Miracle-Gro Company (SMG)
Fixed asset turnover
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,553,100 | 3,371,900 | 3,804,700 | 4,835,700 | 4,051,100 |
| Property, plant and equipment | US$ in thousands | 609,500 | 610,300 | 606,000 | 622,200 | 560,000 |
| Fixed asset turnover | 5.83 | 5.52 | 6.28 | 7.77 | 7.23 |
September 30, 2024 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $3,553,100K ÷ $609,500K
= 5.83
The fixed asset turnover ratio for Scotts Miracle-Gro Company has shown fluctuation over the past five years. The ratio measures the efficiency of the company in generating sales revenue relative to its investment in fixed assets.
From 2020 to 2021, the fixed asset turnover ratio decreased from 7.23 to 7.77, indicating that the company was able to generate more revenue per dollar of fixed assets invested. This could suggest improved asset utilization or increased sales efficiency during this period.
However, from 2021 to 2022, there was a significant decline in the fixed asset turnover ratio to 6.28. This reduction may indicate decreased sales relative to the investment in fixed assets, which could be a cause for concern as it implies lower efficiency in utilizing the company's fixed assets to generate revenue.
In the following years, the ratio continued to fluctuate, with values of 5.52 in 2023 and 5.83 in 2024. These figures suggest that the company's ability to generate sales revenue from its fixed assets has somewhat stabilized but remains below the peak level achieved in 2021.
Overall, the trend in Scotts Miracle-Gro Company's fixed asset turnover ratio highlights the importance of closely monitoring asset utilization and sales efficiency to ensure optimal performance and profitability.
Peer comparison
Sep 30, 2024