Sonoco Products Company (SON)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 6,905,480 | 7,401,800 | 5,720,440 | 5,349,080 | 5,501,240 |
| Property, plant and equipment | US$ in thousands | 1,906,140 | 1,710,400 | 1,297,500 | 1,244,110 | 1,286,840 |
| Fixed asset turnover | 3.62 | 4.33 | 4.41 | 4.30 | 4.27 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $6,905,480K ÷ $1,906,140K
= 3.62
The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate sales revenue. Sonoco Products Co.'s fixed asset turnover ratio has experienced fluctuations over the past five years, ranging from 3.56 in 2023 to 4.31 in 2021. A higher fixed asset turnover ratio indicates that the company is effectively using its fixed assets to generate sales.
In 2023, the fixed asset turnover ratio decreased to 3.56 from the previous year, which may suggest a decrease in efficiency in utilizing fixed assets to generate sales revenue. However, it is crucial to investigate the underlying reasons for this decline.
In comparison, the ratios for 2021, 2022, and 2019 were relatively stable, indicating consistent efficiency in utilizing fixed assets to generate sales revenue during those years. It is worth noting that the company achieved its highest fixed asset turnover ratio of 4.31 in 2021, implying a strong utilization of fixed assets to generate sales revenue during that period.
Overall, Sonoco Products Co.'s fixed asset turnover ratios suggest that the company has generally been efficient in leveraging its fixed assets to drive sales revenue, with some variations in performance over the five-year period. Monitoring this ratio over time can provide valuable insights into the company's operational efficiency and asset utilization strategies.
Peer comparison
Dec 31, 2023