Quest Diagnostics Incorporated (DGX)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 9,100,000 | 9,745,000 | 10,628,000 | 9,437,000 | 7,726,000 |
| Property, plant and equipment | US$ in thousands | 1,816,000 | 1,766,000 | 1,707,000 | 1,627,000 | 1,453,000 |
| Fixed asset turnover | 5.01 | 5.52 | 6.23 | 5.80 | 5.32 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $9,100,000K ÷ $1,816,000K
= 5.01
Quest Diagnostics, Inc.'s fixed asset turnover has demonstrated a fluctuating trend over the past five years. The company's fixed asset turnover ratio decreased from 6.32 in 2021 to 5.80 in 2020, indicating that the company generated less revenue relative to its fixed assets in 2020 compared to the prior year. However, the ratio improved in 2022 to 5.60 before further declining to 5.09 in 2023.
A fixed asset turnover ratio above 1.0 typically indicates efficient utilization of fixed assets to generate revenue. In Quest Diagnostics' case, the ratios for the years analyzed are consistently above 1.0, signifying that the company is effectively using its fixed assets to generate revenue.
The declining trend in the fixed asset turnover ratio from 2022 to 2023 could suggest a decrease in the company's ability to generate revenue from its fixed assets or potential over-investment in fixed assets relative to revenue generation. Further analysis would be needed to understand the specific factors driving these changes and to determine the overall efficiency of Quest Diagnostics, Inc.'s fixed asset utilization.
Peer comparison
Dec 31, 2023