EOG Resources Inc (EOG)

Fixed asset turnover

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Revenue (ttm)	US$ in thousands	24,186,000	24,548,000	25,929,000	27,763,000	25,702,000	25,027,000	22,199,000	18,931,000	18,642,000	15,563,500	13,044,500	10,008,500	11,032,500	12,387,250	14,444,710	18,039,340	17,379,980	17,634,270	18,112,430	17,652,880
Property, plant and equipment	US$ in thousands	32,297,000	31,723,000	30,910,000	30,223,000	29,429,000	29,101,000	28,847,000	28,462,000	28,426,000	28,545,000	28,659,000	28,666,000	28,599,000	28,633,000	29,233,500	29,694,100	30,364,000	30,204,300	29,724,400	29,129,000
Fixed asset turnover		0.75	0.77	0.84	0.92	0.87	0.86	0.77	0.67	0.66	0.55	0.46	0.35	0.39	0.43	0.49	0.61	0.57	0.58	0.61	0.61

December 31, 2023 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $24,186,000K ÷ $32,297,000K
= 0.75

Fixed asset turnover is a key financial ratio that measures a company's ability to generate revenue relative to its investment in fixed assets. EOG Resources, Inc.'s fixed asset turnover ratio has exhibited some fluctuations over the past several quarters. The ratio stood at 0.75 in Q4 2023, declining from the previous quarter's figure of 0.82. This downward trend suggests that EOG Resources may be experiencing challenges in efficiently utilizing its fixed assets to generate revenue.

Comparing the Q4 2023 fixed asset turnover ratio of 0.75 to historical data, we observe a year-over-year decline from 0.87 in Q4 2022. This trend indicates a potential weakening in the company's operational efficiency in utilizing its fixed assets to drive revenue generation. Additionally, the Q4 2023 ratio is lower than the average ratio reported over the past eight quarters, further highlighting a recent decline in asset utilization efficiency.

The declining trend in EOG Resources' fixed asset turnover ratio warrants further investigation into the factors contributing to the inefficiencies in asset utilization. A lower fixed asset turnover ratio may indicate underutilization of assets, poor asset management, or operational inefficiencies within the company. Management should assess and address these issues to improve operational performance and enhance profitability in the long term.

In conclusion, EOG Resources, Inc. should focus on optimizing its asset utilization to improve its fixed asset turnover ratio and enhance overall operational efficiency.