Analog Devices Inc (ADI)

Fixed asset turnover

		Oct 28, 2023	Oct 29, 2022	Oct 30, 2021	Oct 31, 2020	Nov 2, 2019
Revenue	US$ in thousands	12,053,800	11,813,500	6,931,870	5,409,750	5,761,990
Property, plant and equipment	US$ in thousands	3,219,160	2,401,300	1,979,050	1,120,560	1,219,990
Fixed asset turnover		3.74	4.92	3.50	4.83	4.72

October 28, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $12,053,800K ÷ $3,219,160K
= 3.74

Analog Devices Inc.'s fixed asset turnover ratio measures how efficiently the company is generating sales revenue from its investment in fixed assets. A higher ratio indicates better utilization of fixed assets to generate sales.

Looking at the trend, we observe that the fixed asset turnover has fluctuated over the past five years. In 2023, the ratio declined to 3.82 from 5.00 in 2022, showing a decrease in the efficiency of generating sales from fixed assets. It is important for the company to investigate the cause behind this decline.

In 2021 and 2019, the fixed asset turnover was 3.70 and 4.91 respectively, displaying a slightly lower efficiency in utilizing fixed assets to generate sales compared to 2022. This suggests a need for the company to focus on improving the utilization of its fixed assets to enhance sales efficiency.

Overall, the trend indicates some variability in the efficiency of generating sales from fixed assets. It would be beneficial for the company to carefully assess its fixed asset management and consider strategies to improve the utilization of these assets for revenue generation.