Danaher Corporation (DHR)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 23,693,000 | 31,383,000 | 29,239,000 | 21,983,000 | 17,796,000 |
| Property, plant and equipment | US$ in thousands | 4,553,000 | 3,709,000 | 3,790,000 | 3,262,000 | 2,302,000 |
| Fixed asset turnover | 5.20 | 8.46 | 7.71 | 6.74 | 7.73 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $23,693,000K ÷ $4,553,000K
= 5.20
The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate revenue. In the case of Danaher Corp., the trend of the fixed asset turnover ratio over the past five years shows some fluctuations.
In 2023, the fixed asset turnover ratio was 5.25, indicating that for every dollar invested in fixed assets, Danaher generated $5.25 in sales. This ratio decreased from the previous year's value of 7.96.
The decline in the fixed asset turnover ratio could suggest a decrease in the company's efficiency in using its fixed assets to generate revenue in the most recent year. It may imply that Danaher was not able to generate as much revenue relative to its investment in fixed assets compared to the previous year.
However, it is essential to consider the nature of the company's industry and specific circumstances before drawing definitive conclusions. Further analysis of the company's operations, investment in fixed assets, and revenue generation strategies is necessary to fully understand the reasons behind the fluctuations in the fixed asset turnover ratio for Danaher Corp.
Peer comparison
Dec 31, 2023