UGI Corporation (UGI)
Fixed asset turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 8,928,000 | 10,106,000 | 7,447,000 | 6,559,000 | 7,320,000 |
| Property, plant and equipment | US$ in thousands | 8,547,000 | 8,040,000 | 7,558,000 | 6,960,000 | 6,687,800 |
| Fixed asset turnover | 1.04 | 1.26 | 0.99 | 0.94 | 1.09 |
September 30, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $8,928,000K ÷ $8,547,000K
= 1.04
The fixed asset turnover ratio measures the efficiency with which a company generates revenue from its fixed assets. A higher fixed asset turnover ratio indicates that the company is using its fixed assets more efficiently to generate sales.
Looking at UGI Corp.'s fixed asset turnover over the past five years, we observe some fluctuation in the ratio. In 2023, the ratio stands at 1.04, which is a decrease from the previous year's value of 1.26. This indicates that UGI Corp. generated $1.04 in sales for every $1 of fixed assets during the period. The decrease in the ratio could imply a potential decrease in the efficiency of utilizing fixed assets to generate sales.
It's important to note that a declining trend in the fixed asset turnover ratio may raise concerns about the company's ability to effectively utilize its fixed assets to drive revenue. A deeper analysis of the company's asset management and sales generation strategies would be necessary to understand the factors driving the changes in the fixed asset turnover ratio.
Furthermore, comparing the company's fixed asset turnover to industry benchmarks and its own historical performance can provide additional insights into the company's efficiency in managing its fixed assets.
Peer comparison
Sep 30, 2023