Applied Materials Inc (AMAT)

Fixed asset turnover

		Oct 27, 2024	Jul 28, 2024	Apr 28, 2024	Jan 28, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Oct 25, 2020	Jul 26, 2020	Apr 26, 2020	Jan 26, 2020
Revenue (ttm)	US$ in thousands	27,058,000	26,743,000	26,339,000	26,311,000	26,274,000	26,319,000	26,414,000	26,027,000	25,590,000	24,905,000	24,569,000	23,924,000	22,880,000	21,547,000	19,794,000	18,202,000	17,202,000	16,268,000	15,435,000	15,017,000
Property, plant and equipment	US$ in thousands	3,339,000	3,100,000	2,958,000	2,826,000	2,723,000	2,604,000	2,559,000	2,494,000	2,307,000	2,194,000	2,071,000	1,974,000	1,934,000	1,814,000	1,768,000	1,638,000	1,604,000	1,530,000	1,534,000	1,555,000
Fixed asset turnover		8.10	8.63	8.90	9.31	9.65	10.11	10.32	10.44	11.09	11.35	11.86	12.12	11.83	11.88	11.20	11.11	10.72	10.63	10.06	9.66

October 27, 2024 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $27,058,000K ÷ $3,339,000K
= 8.10

Applied Materials Inc's fixed asset turnover has been consistently increasing over the past two years, indicating that the company is effectively utilizing its fixed assets to generate sales. The trend shows a positive trajectory, with the most recent figure standing at 8.10 in October 2024, compared to 9.66 in January 2020. This improvement suggests that the company is becoming more efficient in generating revenue from its fixed assets.

A high fixed asset turnover ratio typically signifies efficient asset utilization and effective management of fixed assets to drive sales. Applied Materials Inc's continuous increase in fixed asset turnover reflects that the company is likely making strategic investments in its fixed assets, which are yielding higher sales. This could be attributed to operational improvements, technological advancements, or better capital allocation decisions.

Overall, the trend in Applied Materials Inc's fixed asset turnover ratio paints a positive picture of the company's operational efficiency and ability to generate revenue from its fixed assets. However, it is important to consider other factors and ratios in conjunction with fixed asset turnover to gain a holistic understanding of the company's financial performance and operational efficiency.