Abbott Laboratories (ABT)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 39,431,000 | 43,093,000 | 42,541,000 | 34,070,000 | 31,164,000 |
| Property, plant and equipment | US$ in thousands | 10,154,000 | 9,162,000 | 8,959,000 | 9,029,000 | 8,038,000 |
| Fixed asset turnover | 3.88 | 4.70 | 4.75 | 3.77 | 3.88 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $39,431,000K ÷ $10,154,000K
= 3.88
Abbott Laboratories' fixed asset turnover ratio has exhibited a fluctuating trend over the past five years. The ratio was highest in 2021 at 4.81, showing that the company generated $4.81 in revenue for every $1 invested in fixed assets during that year. This indicates efficient utilization of fixed assets to generate sales during 2021.
In 2022, the fixed asset turnover ratio decreased to 4.76, still reflecting effective asset utilization. However, in 2023, the ratio decreased further to 3.95, which may suggest a potential decrease in sales generated per dollar of fixed assets invested. This decrease in 2023 could be a cause for concern as it might indicate a decline in efficiency or effectiveness in utilizing the company's fixed assets to generate revenue.
Comparing the latest ratio to previous years, Abbott Laboratories' fixed asset turnover in 2023 is lower than in 2021 and 2022 but remains higher than in 2020 and 2019. This signifies that although there has been a slight decline in asset turnover efficiency in 2023, the company has historically been effective in making use of its fixed assets to drive revenue.
Overall, Abbott Laboratories should closely monitor its fixed asset turnover ratio to ensure that the company continues to efficiently utilize its fixed assets to generate sales and maintain financial performance.
Peer comparison
Dec 31, 2023