Wolfspeed Inc (WOLF)

Fixed asset turnover

		Jun 30, 2024	Mar 31, 2024	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
Revenue (ttm)	US$ in thousands	808,400	641,700	715,400	780,300	879,900	881,000	849,900	784,800	699,400	624,100	566,500	539,700	592,900	652,800	734,000	857,800	896,200	941,700	1,000,689	1,165,805
Property, plant and equipment	US$ in thousands	3,643,200	3,212,600	2,840,900	2,443,900	2,154,800	1,894,200	1,639,600	1,519,400	1,470,800	1,379,400	1,401,900	1,324,700	1,276,800	1,154,000	1,025,100	940,900	831,100	737,600	692,400	656,500
Fixed asset turnover		0.22	0.20	0.25	0.32	0.41	0.47	0.52	0.52	0.48	0.45	0.40	0.41	0.46	0.57	0.72	0.91	1.08	1.28	1.45	1.78

June 30, 2024 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $808,400K ÷ $3,643,200K
= 0.22

The fixed asset turnover ratio measures the efficiency with which Wolfspeed Inc generates sales revenue relative to its investment in fixed assets. A higher fixed asset turnover ratio indicates that the company is generating more sales revenue for each dollar invested in fixed assets.

Analyzing the trend of Wolfspeed Inc's fixed asset turnover over the past several quarters, we observe a fluctuating pattern. The ratio ranged from a low of 0.20 in March 2024 to a high of 1.78 in September 2019. The ratio has shown a general decreasing trend from 2019 to 2020, indicating a decline in efficiency in generating sales revenue from fixed assets during this period. However, from 2020 onwards, we observe an increasing trend in the fixed asset turnover ratio, suggesting improved efficiency in utilizing fixed assets to generate sales revenue.

The recent ratio of 0.22 in June 2024 indicates that for every dollar of fixed assets invested, Wolfspeed Inc generated $0.22 in sales revenue. While the current ratio is lower compared to the ratios in the earlier periods, it is important to consider the industry averages and benchmarks for a better understanding of Wolfspeed Inc's performance in utilizing fixed assets to generate sales.

Overall, the trend in Wolfspeed Inc's fixed asset turnover suggests fluctuations in efficiency over the analyzed periods, with recent indications of improvement. Monitoring this ratio going forward will be crucial in assessing the company's ability to optimize the utilization of fixed assets in generating sales revenue.