The AES Corporation (AES)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 12,668,000 | 12,617,000 | 11,141,000 | 9,660,000 | 10,189,000 |
| Property, plant and equipment | US$ in thousands | 29,958,000 | 23,039,000 | 19,906,000 | 22,826,000 | 22,574,000 |
| Fixed asset turnover | 0.42 | 0.55 | 0.56 | 0.42 | 0.45 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $12,668,000K ÷ $29,958,000K
= 0.42
The fixed asset turnover ratio measures how efficiently AES Corp. generates revenue from its fixed assets. A higher ratio indicates better utilization of fixed assets to generate sales.
Looking at the trend over the past five years, we can observe fluctuations in the fixed asset turnover ratio for AES Corp. In 2023, the ratio decreased to 0.42 from 0.55 in 2022, indicating a decrease in revenue generated relative to the investment in fixed assets. This could suggest inefficiencies in asset utilization or a decline in sales compared to the previous year.
On the other hand, the company saw an improvement in the fixed asset turnover ratio from 2020 to 2022, where the ratio increased from 0.42 to 0.55. This suggests an enhancement in efficiency in generating sales from fixed assets during these years.
Overall, AES Corp. may need to further analyze the reasons behind the fluctuations in the fixed asset turnover ratio to identify areas for improvement in asset utilization and revenue generation efficiency.