Worthington Industries Inc (WOR)
Total asset turnover
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,916,390 | 5,242,220 | 3,171,430 | 3,059,120 | 3,759,560 |
| Total assets | US$ in thousands | 3,650,920 | 3,643,020 | 3,373,240 | 2,331,520 | 2,510,800 |
| Total asset turnover | 1.35 | 1.44 | 0.94 | 1.31 | 1.50 |
May 31, 2023 calculation
Total asset turnover = Revenue ÷ Total assets
= $4,916,390K ÷ $3,650,920K
= 1.35
The total asset turnover ratio measures a company's ability to generate sales from its assets. A higher ratio indicates that the company is utilizing its assets more efficiently to generate sales.
Looking at Worthington Enterprises Inc.'s total asset turnover over the past 5 years, we observe fluctuations in the ratio. In 2023, the total asset turnover ratio was 1.35, showing a marginal decline from the previous year. This could suggest a decrease in the efficiency of the company's asset utilization in generating sales. It's important to investigate the factors contributing to this decline.
In 2022, the total asset turnover ratio was 1.44, which was a positive indication of the company's ability to generate sales from its assets. However, in 2021, the ratio dropped significantly to 0.94, indicating a decline in the efficiency of asset utilization compared to the previous year. This could be a red flag and warrants further investigation into the company's asset management and sales generation strategies during that period.
The total asset turnover ratio rebounded in 2020 to 1.31, indicating a recovery in the efficiency of asset utilization to generate sales. Furthermore, the ratio was at its highest in 2019, reaching 1.50, indicating effective asset management and higher sales generation from the assets.
In conclusion, the trend in Worthington Enterprises Inc.'s total asset turnover ratio shows fluctuations over the years, reflecting changes in the company's ability to efficiently utilize its assets to generate sales. It is crucial for the company to analyze the reasons behind these fluctuations and implement strategies to consistently improve its asset turnover ratio for sustainable growth and profitability.
Peer comparison
May 31, 2023