Applied Materials Inc (AMAT)
Fixed asset turnover
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 26,274,000 | 25,590,000 | 22,827,000 | 16,962,000 | 14,608,000 |
| Property, plant and equipment | US$ in thousands | 2,723,000 | 2,307,000 | 1,934,000 | 1,604,000 | 1,529,000 |
| Fixed asset turnover | 9.65 | 11.09 | 11.80 | 10.57 | 9.55 |
October 29, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $26,274,000K ÷ $2,723,000K
= 9.65
The fixed asset turnover ratio measures the efficiency of a company in generating sales revenue from its investment in fixed assets. A higher fixed asset turnover ratio indicates that the company is utilizing its fixed assets more efficiently to generate sales.
Analyzing the trend of fixed asset turnover for Applied Materials Inc. over the past five years, we observe a fluctuating pattern. In the fiscal year ending October 29, 2023, the fixed asset turnover was 9.74, which decreased from 11.18 in the previous year (ending October 30, 2022) and 11.93 in the year prior to that (ending October 31, 2021). This decrease may indicate a decline in the company's ability to generate sales from its fixed assets efficiently.
However, it's important to note that the fixed asset turnover of 9.74 in 2023 is still relatively high, suggesting that the company is effectively using its fixed assets to generate sales compared to the previous years. This level of efficiency could be indicative of effective asset management and operational performance.
The trend over the past five years shows that the fixed asset turnover ratio has fluctuated within a relatively narrow range, with a peak of 11.93 in 2021 and a low of 9.55 in 2019. This indicates that Applied Materials Inc. has been consistently efficient in generating sales from its investment in fixed assets, albeit with some variability.
In conclusion, while the fixed asset turnover ratio for Applied Materials Inc. decreased in 2023, the company has historically demonstrated effective utilization of fixed assets to generate sales revenue. However, it would be important to closely monitor this ratio in future periods to understand the implications on the company's operational efficiency and asset management.
Peer comparison
Oct 29, 2023