Terex Corporation (TEX)
Fixed asset turnover
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 5,127,200 | 5,108,800 | 5,186,900 | 5,208,300 | 5,151,500 | 5,146,500 | 4,976,900 | 4,650,900 | 4,417,700 | 4,190,200 | 4,063,500 | 4,025,100 | 3,886,800 | 3,683,400 | 3,455,200 | 3,107,000 | 3,076,400 | 3,174,700 | 3,433,700 | 4,050,100 |
| Property, plant and equipment | US$ in thousands | 714,000 | 602,000 | 574,500 | 573,700 | 570,000 | 500,500 | 490,700 | 478,900 | 465,600 | 450,400 | 441,800 | 433,900 | 429,600 | 412,600 | 413,600 | 396,800 | 406,600 | 401,700 | 400,800 | 388,800 |
| Fixed asset turnover | 7.18 | 8.49 | 9.03 | 9.08 | 9.04 | 10.28 | 10.14 | 9.71 | 9.49 | 9.30 | 9.20 | 9.28 | 9.05 | 8.93 | 8.35 | 7.83 | 7.57 | 7.90 | 8.57 | 10.42 |
December 31, 2024 calculation
Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $5,127,200K ÷ $714,000K
= 7.18
Fixed asset turnover measures how efficiently a company utilizes its fixed assets to generate revenue. A higher fixed asset turnover ratio indicates that the company is more efficient in generating sales from its investment in fixed assets.
Analyzing Terex Corporation's fixed asset turnover ratio over the reported periods shows a general decreasing trend from March 31, 2020, to December 31, 2024. The ratio started at 10.42 on March 31, 2020, indicating that the company was generating $10.42 in revenue for every dollar invested in fixed assets. However, the ratio gradually decreased over time, reaching a low of 7.18 on December 31, 2024.
The declining trend in fixed asset turnover could suggest that Terex Corporation may be facing challenges in efficiently utilizing its fixed assets to generate revenue. It is essential for the company to closely monitor and address the factors contributing to this decline to improve its operational efficiency and profitability in the long run.
Overall, the analysis of Terex Corporation's fixed asset turnover ratio indicates a need for the company to focus on optimizing its asset utilization to enhance overall financial performance and shareholder value.