Alkermes Plc (ALKS)

Fixed asset turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	1,639,870	1,099,460	1,162,060	1,032,500	1,156,450
Property, plant and equipment	US$ in thousands	226,943	222,919	341,054	350,003	362,168
Fixed asset turnover		7.23	4.93	3.41	2.95	3.19

December 31, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $1,639,870K ÷ $226,943K
= 7.23

The fixed asset turnover ratio of Alkermes plc has shown a significant improvement over the past five years. In 2023, the ratio stands at 7.33, which indicates that the company generates $7.33 in revenue for each dollar invested in fixed assets. This represents a considerable increase compared to the previous year, where the ratio was 3.42.

The upward trend in fixed asset turnover suggests that Alkermes plc is utilizing its fixed assets more efficiently to generate revenue. This can be attributed to factors such as better asset management, increased operational efficiency, or a shift towards higher-margin products or services.

Furthermore, the consistent improvement in the fixed asset turnover ratio over the past five years reflects positively on the company's financial performance and operational effectiveness. It indicates that Alkermes plc has been able to optimize the utilization of its fixed assets to drive revenue growth and maximize profitability. A higher fixed asset turnover ratio is generally considered favorable as it implies that a company is generating more sales from its investments in fixed assets.