Cadence Design Systems Inc (CDNS)
Total asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,048,310 | 3,534,360 | 2,967,550 | 2,661,760 | 2,308,580 |
| Total assets | US$ in thousands | 5,669,490 | 5,137,070 | 4,386,300 | 3,950,780 | 3,357,220 |
| Total asset turnover | 0.71 | 0.69 | 0.68 | 0.67 | 0.69 |
December 31, 2023 calculation
Total asset turnover = Revenue ÷ Total assets
= $4,048,310K ÷ $5,669,490K
= 0.71
The total asset turnover ratio for Cadence Design Systems, Inc. has shown a relatively stable trend over the past five years, ranging from 0.68 to 0.72. This ratio indicates how efficiently the company is generating revenue from its total assets.
A total asset turnover ratio of less than 1 generally suggests that the company is not generating enough sales from its assets, which could indicate underutilization of assets or inefficiencies in operations. In the case of Cadence Design Systems, Inc., the ratios ranging between 0.68 and 0.72 indicate that the company is generating approximately $0.68 to $0.72 of revenue for every dollar of assets it holds.
While the total asset turnover has fluctuated slightly over the years, it is essential to analyze other factors such as industry norms and competitors' ratios to gain a better understanding of Cadence Design Systems, Inc.'s performance in utilizing its assets efficiently. Further investigation into the company's revenue growth, asset management practices, and operational efficiency would provide deeper insights into the overall effectiveness of utilizing its assets to generate sales.
Peer comparison
Dec 31, 2023