Trex Company Inc (TREX)
Fixed asset turnover
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 1,092,772 | 1,073,190 | 957,092 | 988,224 | 1,090,705 | 1,218,011 | 1,365,421 | 1,290,639 | 1,197,050 | 1,121,376 | 1,017,204 | 926,340 | 881,755 | 818,241 | 781,826 | 767,561 | 746,138 | 721,337 | 692,644 | 692,513 |
| Property, plant and equipment | US$ in thousands | 709,402 | 671,035 | 645,656 | 617,503 | 589,892 | 536,359 | 505,395 | 472,525 | 460,365 | 424,974 | 404,990 | 378,167 | 336,537 | 260,519 | 224,909 | 193,099 | 171,300 | 143,893 | 129,612 | 122,492 |
| Fixed asset turnover | 1.54 | 1.60 | 1.48 | 1.60 | 1.85 | 2.27 | 2.70 | 2.73 | 2.60 | 2.64 | 2.51 | 2.45 | 2.62 | 3.14 | 3.48 | 3.97 | 4.36 | 5.01 | 5.34 | 5.65 |
December 31, 2023 calculation
Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $1,092,772K ÷ $709,402K
= 1.54
Fixed asset turnover is a financial ratio that measures a company's ability to generate sales revenue relative to its investment in fixed assets. A higher fixed asset turnover ratio implies that the company is more efficient in generating sales with its fixed assets.
Based on the data provided for TREX Co., Inc., we can observe a declining trend in the fixed asset turnover ratio over the last eight quarters. The ratio decreased from 2.73 in Q1 2022 to 1.54 in Q4 2023. This downward trend indicates that the company's ability to generate sales from its fixed assets has weakened over time.
The decreasing fixed asset turnover ratio could be attributed to various factors such as inefficient utilization of fixed assets, underperformance in sales, or an increase in the value of fixed assets without a proportional increase in sales revenue. It is important for TREX Co., Inc. to closely evaluate the efficiency of its fixed asset utilization and consider strategies to improve this ratio in order to enhance profitability and overall performance.
Peer comparison
Dec 31, 2023