Transdigm Group Incorporated (TDG)
Fixed asset turnover
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 7,940,000 | 6,585,000 | 5,429,000 | 4,798,000 | 5,103,000 |
| Property, plant and equipment | US$ in thousands | 1,488,000 | 1,255,000 | 807,000 | 770,000 | 752,000 |
| Fixed asset turnover | 5.34 | 5.25 | 6.73 | 6.23 | 6.79 |
September 30, 2024 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $7,940,000K ÷ $1,488,000K
= 5.34
The fixed asset turnover ratio measures how efficiently Transdigm Group Incorporated utilizes its fixed assets to generate sales. A higher ratio indicates better asset utilization.
From 2020 to 2024, Transdigm's fixed asset turnover has fluctuated within a relatively narrow range, declining from 6.79 in 2020 to 5.34 in 2024. This indicates that the company's ability to generate sales from its fixed asset base has slightly decreased over this period. The lower ratio in 2024 compared to previous years suggests that Transdigm may be experiencing challenges in maximizing the revenue generated from its fixed assets.
It is essential for the company to investigate the factors contributing to this decline and take necessary steps to improve the efficiency of asset utilization in order to enhance profitability and long-term sustainability.