Unifirst Corporation (UNF)
Fixed asset turnover
| Aug 26, 2023 | Aug 27, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,239,780 | 2,003,670 | 1,828,780 | 1,810,540 | 1,818,460 |
| Property, plant and equipment | US$ in thousands | 756,540 | 665,119 | 617,719 | 582,470 | 574,509 |
| Fixed asset turnover | 2.96 | 3.01 | 2.96 | 3.11 | 3.17 |
August 26, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $2,239,780K ÷ $756,540K
= 2.96
The fixed asset turnover ratio measures how efficiently a company is using its fixed assets to generate sales. A higher fixed asset turnover ratio generally indicates better utilization of fixed assets.
Looking at the data provided, Unifirst Corp.'s fixed asset turnover ratio has shown a declining trend over the past five years. In August 2023, the fixed asset turnover ratio stood at 2.95, slightly lower compared to the previous year's 3.01.
This decline in the fixed asset turnover ratio may suggest that Unifirst Corp. is becoming less efficient in generating sales from its fixed assets. There could be various reasons for this trend, such as underutilization of fixed assets, aging infrastructure, or ineffective asset management strategies.
It's important for Unifirst Corp. to further investigate the reasons behind this trend and take necessary actions to improve the utilization of its fixed assets. This could involve implementing better maintenance and upgrade plans for existing assets, evaluating the need for new investments, or reassessing the company's overall operational efficiency.
In summary, the declining trend in Unifirst Corp.'s fixed asset turnover ratio over the past five years may indicate a potential inefficiency in utilizing its fixed assets to generate sales. It's essential for the company to address this trend to ensure optimal utilization of its fixed assets and improve overall operational efficiency.
Peer comparison
Aug 26, 2023