Avis Budget Group Inc (CAR)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 12,008,000 | 11,994,000 | 9,313,000 | 5,402,000 | 9,172,000 |
| Property, plant and equipment | US$ in thousands | 719,000 | 594,000 | 537,000 | 657,000 | 792,000 |
| Fixed asset turnover | 16.70 | 20.19 | 17.34 | 8.22 | 11.58 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $12,008,000K ÷ $719,000K
= 16.70
Fixed asset turnover is a financial ratio that measures a company's ability to generate revenue from its investment in fixed assets. A higher fixed asset turnover ratio indicates that the company is using its fixed assets more efficiently to generate sales.
In the case of Avis Budget Group Inc, the fixed asset turnover ratio has fluctuated over the past five years. The ratio decreased from 0.71 in 2019 to 0.61 in 2020, but then showed an improvement to 0.69 in 2021. However, in the subsequent years, the ratio declined to 0.72 in 2022 and further to 0.55 in 2023.
This declining trend in the fixed asset turnover ratio indicates that Avis Budget Group Inc may be experiencing challenges in optimizing its fixed assets to generate revenue. It suggests that the company may not be efficiently utilizing its investments in property, plant, and equipment to drive sales.
Further analysis of the company's operations and investment strategies is recommended to identify the underlying reasons for the decline in the fixed asset turnover ratio and to assess the effectiveness of Avis Budget Group Inc in managing its fixed assets for revenue generation.
Peer comparison
Dec 31, 2023