Woodward Inc (WWD)
Fixed asset turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,865,510 | 2,353,550 | 2,214,170 | 2,467,570 | 2,857,210 |
| Property, plant and equipment | US$ in thousands | 913,094 | 910,472 | 950,569 | 997,415 | 1,058,780 |
| Fixed asset turnover | 3.14 | 2.58 | 2.33 | 2.47 | 2.70 |
September 30, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $2,865,510K ÷ $913,094K
= 3.14
The fixed asset turnover ratio for Woodward Inc has exhibited a generally positive trend over the past five years, indicating an improvement in the company's efficiency in generating sales from its investment in fixed assets. The ratio increased from 2.36 in 2021 to 3.19 in 2023, suggesting that the company is utilizing its fixed assets more effectively to generate revenue.
This improvement may be attributed to factors such as increased sales, better asset management, or a more streamlined production process. A higher fixed asset turnover ratio reflects a more efficient use of fixed assets to generate sales, which is generally favorable for a company.
However, it is important to note that while a higher ratio is generally desirable, an exceptionally high ratio may also indicate that the company is not investing enough in its fixed assets, which could potentially lead to capacity constraints in the future. Therefore, it is crucial for Woodward Inc to maintain a balance between efficient asset utilization and the need for adequate investment in fixed assets to support its operations and future growth.