Trane Technologies plc (TT)
Total asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 17,423,000 | 15,750,300 | 13,892,000 | 12,196,000 | 16,343,600 |
| Total assets | US$ in thousands | 19,391,900 | 18,081,600 | 18,059,800 | 18,156,700 | 20,492,300 |
| Total asset turnover | 0.90 | 0.87 | 0.77 | 0.67 | 0.80 |
December 31, 2023 calculation
Total asset turnover = Revenue ÷ Total assets
= $17,423,000K ÷ $19,391,900K
= 0.90
Total asset turnover is a key financial ratio that measures a company's ability to generate revenue from its assets. In the case of Trane Technologies plc, we observe fluctuations in total asset turnover over the past five years. The ratio has been increasing from 0.81 in 2019 to 0.91 in 2023, indicating that the company has been more efficient in utilizing its assets to generate sales. A higher total asset turnover suggests that Trane Technologies plc is generating more revenue per dollar of assets, which is a positive sign of operational efficiency. This trend may be attributed to improved asset management, higher sales volume, or a combination of both. It would be beneficial to monitor this ratio in the future to assess the company's continued effectiveness in utilizing its assets to drive revenue.