Tetra Tech Inc (TTEK)
Fixed asset turnover
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 5,199,270 | 4,470,860 | 3,490,830 | 3,200,980 | 2,991,130 |
| Property, plant and equipment | US$ in thousands | 73,065 | 74,832 | 32,316 | 37,733 | 35,507 |
| Fixed asset turnover | 71.16 | 59.75 | 108.02 | 84.83 | 84.24 |
September 30, 2024 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $5,199,270K ÷ $73,065K
= 71.16
The fixed asset turnover ratio measures how efficiently Tetra Tech Inc is utilizing its fixed assets to generate revenue. A higher fixed asset turnover indicates that the company is generating more revenue per dollar invested in fixed assets.
Analyzing Tetra Tech Inc's fixed asset turnover over the past five years, we observe a fluctuating trend. In 2022, the ratio was significantly higher at 108.02, implying that the company generated $108.02 in revenue for every dollar invested in fixed assets. This indicates a high level of efficiency in asset utilization during that year.
However, in 2023 and 2024, the fixed asset turnover ratio decreased to 59.75 and 71.16, respectively. This decline suggests a decrease in revenue generation relative to the investment in fixed assets during those years, indicating potential inefficiency in asset utilization.
Overall, Tetra Tech Inc should focus on improving its fixed asset turnover ratio in order to enhance efficiency in utilizing its fixed assets and maximize revenue generation. Implementing strategies to better manage and utilize fixed assets can lead to improved financial performance and profitability for the company in the long run.
Peer comparison
Sep 30, 2024