Wingstop Inc (WING)

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	460,055	437,865	413,433	390,037	357,521	324,682	297,794	288,017	282,502	273,756	271,960	264,065	248,811	238,715	224,602	207,059	199,676	186,999	175,370	163,845
Property, plant and equipment	US$ in thousands	91,292	84,344	78,570	71,518	66,851	63,236	60,854	57,314	54,503	49,151	39,598	30,473	27,948	27,196	27,220	28,434	27,842	27,291	8,361	8,299
Fixed asset turnover		5.04	5.19	5.26	5.45	5.35	5.13	4.89	5.03	5.18	5.57	6.87	8.67	8.90	8.78	8.25	7.28	7.17	6.85	20.97	19.74

December 31, 2023 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $460,055K ÷ $91,292K
= 5.04

Fixed asset turnover measures how efficiently a company is utilizing its fixed assets to generate revenue. A higher fixed asset turnover ratio indicates that the company is generating more sales relative to its investment in fixed assets.

Looking at the trend of Wingstop Inc's fixed asset turnover ratio over the past several quarters, we can see fluctuations in the ratio. In the most recent quarter, the fixed asset turnover ratio stands at 5.04, showing a slight decrease compared to the previous quarter. However, the ratio remains relatively stable around the 5.00 level over the past few quarters, indicating that Wingstop Inc has been consistently efficient in utilizing its fixed assets to generate revenue.

It is important to note the significant spike in fixed asset turnover ratio in the first half of 2021, where the ratio peaked at 8.90 in June 2021, and soared to 8.25 in March 2021, and as high as 6.87 in December 2020. This sudden increase could be attributed to various factors such as increased sales, improved operational efficiency, or perhaps a reduction in the value of fixed assets on the balance sheet.

Additionally, the fixed asset turnover ratio experienced an exceptional surge in efficiency in the first half of 2019, with ratios exceeding 20.00 and 19.00. This may indicate a significant increase in sales relative to the investment in fixed assets during that period.

Overall, Wingstop Inc's fixed asset turnover ratio has shown resilience and consistency over the quarters, reflecting the company’s ability to efficiently utilize its fixed assets to generate revenue. It is important for investors and stakeholders to monitor this ratio alongside other financial metrics to gain a comprehensive understanding of the company's operational efficiency and performance.