Advanced Drainage Systems Inc (WMS)
Fixed asset turnover
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,881,170 | 3,071,540 | 2,768,550 | 1,976,670 | 1,633,150 |
| Property, plant and equipment | US$ in thousands | 798,283 | 733,059 | 619,383 | 504,275 | 481,380 |
| Fixed asset turnover | 3.61 | 4.19 | 4.47 | 3.92 | 3.39 |
March 31, 2024 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $2,881,170K ÷ $798,283K
= 3.61
Fixed asset turnover measures how efficiently a company generates revenue from its investment in fixed assets. It is calculated by dividing net sales by average fixed assets. Looking at the trend of Advanced Drainage Systems Inc's fixed asset turnover over the past five years, we can observe fluctuations.
In 2020, the fixed asset turnover was 3.39, indicating that the company generated $3.39 in sales for every dollar invested in fixed assets. This ratio increased in 2021 to 3.92, suggesting improved efficiency in utilizing fixed assets to generate revenue.
In 2022, there was a further increase in fixed asset turnover to 4.47, signifying an even more efficient use of fixed assets to drive revenue. However, in 2023, the ratio dipped slightly to 4.19 before dropping further to 3.61 in 2024.
The downward trend in fixed asset turnover from 2022 to 2024 could indicate a potential concern as it suggests that the company may be less efficient in generating sales from its fixed assets in recent years. Further analysis would be necessary to understand the reasons behind this trend and assess the overall efficiency of Advanced Drainage Systems Inc in managing its fixed assets.