West Pharmaceutical Services Inc (WST)
Total asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,918,500 | 2,886,900 | 2,831,600 | 2,146,900 | 1,839,900 |
| Total assets | US$ in thousands | 3,829,500 | 3,616,800 | 3,313,800 | 2,793,800 | 2,341,400 |
| Total asset turnover | 0.76 | 0.80 | 0.85 | 0.77 | 0.79 |
December 31, 2023 calculation
Total asset turnover = Revenue ÷ Total assets
= $2,918,500K ÷ $3,829,500K
= 0.76
The total asset turnover ratio of West Pharmaceutical Services, Inc. has experienced some fluctuations over the past five years. The ratio decreased from 0.79 in 2019 to 0.77 in 2020, before slightly increasing to 0.85 in 2021. However, in the two most recent years, the ratio declined to 0.80 in 2022 and further decreased to 0.77 in 2023.
A total asset turnover ratio below 1 indicates that the company generates less in revenue than the value of its total assets. This suggests that West Pharmaceutical Services, Inc. may not be efficiently utilizing its assets to generate sales. A declining trend in the total asset turnover ratio over the years raises concerns about the company's asset utilization efficiency and its ability to generate sales relative to its asset base.
Further analysis of the company's operations and asset management practices may be necessary to determine the underlying reasons for the fluctuations in the total asset turnover ratio and to identify potential areas for improvement in asset utilization efficiency.
Peer comparison
Dec 31, 2023