Trex Company Inc (TREX)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,091,690 | 1,090,750 | 1,197,010 | 881,886 | 746,565 |
| Property, plant and equipment | US$ in thousands | 709,402 | 589,892 | 460,365 | 336,537 | 171,300 |
| Fixed asset turnover | 1.54 | 1.85 | 2.60 | 2.62 | 4.36 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $1,091,690K ÷ $709,402K
= 1.54
The fixed asset turnover ratio of TREX Co., Inc. has shown a decreasing trend over the past five years. In 2023, the ratio stood at 1.54, which indicates that for every dollar invested in fixed assets, the company generated $1.54 of sales revenue. This was a decrease compared to the previous year when the ratio was 1.87.
The declining trend in fixed asset turnover may suggest inefficiencies in the utilization of the company's fixed assets to generate sales. It could indicate that TREX Co., Inc. is not effectively using its fixed assets to drive revenue growth or that the company's sales performance is not keeping pace with its investment in fixed assets.
Further analysis is recommended to understand the reasons behind the decreasing fixed asset turnover ratio and to identify potential areas for improvement in asset management and operational efficiency within TREX Co., Inc.
Peer comparison
Dec 31, 2023