CenterPoint Energy Inc (CNP)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 8,696,000 | 9,321,000 | 8,352,000 | 7,418,000 | 7,564,000 |
| Property, plant and equipment | US$ in thousands | 29,853,000 | 27,143,000 | 23,484,000 | 22,362,000 | 20,624,000 |
| Fixed asset turnover | 0.29 | 0.34 | 0.36 | 0.33 | 0.37 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $8,696,000K ÷ $29,853,000K
= 0.29
The fixed asset turnover ratio measures a company's efficiency in generating sales revenue from its investment in fixed assets. A higher fixed asset turnover ratio indicates better utilization of fixed assets to generate revenue.
Centerpoint Energy Inc.'s fixed asset turnover has experienced fluctuations over the past five years. The ratio decreased from 0.59 in 2019 to 0.29 in 2023. This downward trend suggests a decline in the company's efficiency in generating sales from its fixed assets.
The low fixed asset turnover ratio in 2023 could be a cause for concern as it indicates that Centerpoint Energy may not be effectively utilizing its fixed assets to generate revenue compared to previous years. Management should investigate the reasons behind this decline and look for ways to improve asset utilization to enhance overall profitability and operational efficiency.
Peer comparison
Dec 31, 2023