Ford Motor Company (F)

Fixed asset turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	176,191,000	158,057,000	136,341,000	127,144,000	155,900,000
Property, plant and equipment	US$ in thousands	40,821,000	37,265,000	37,139,000	37,083,000	36,469,000
Fixed asset turnover		4.32	4.24	3.67	3.43	4.27

December 31, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $176,191,000K ÷ $40,821,000K
= 4.32

Fixed asset turnover is a ratio that measures a company's ability to generate sales revenue from its investment in fixed assets such as property, plant, and equipment. A higher fixed asset turnover indicates that the company is using its fixed assets more efficiently to generate sales.

Analyzing Ford Motor Co.'s fixed asset turnover over the past five years, we observe a fluctuating trend. In 2023, the fixed asset turnover ratio increased to 4.32 from 4.24 in 2022, suggesting that Ford improved its efficiency in utilizing its fixed assets to generate sales revenue. This improvement is a positive sign as it indicates a better utilization of the company's fixed assets compared to the previous year.

Comparing the 2023 ratio to earlier years, we can see a notable increase from 2019 and a steady improvement since 2020. This could reflect ongoing efforts by Ford to optimize the use of its fixed assets and potentially increase productivity.

Overall, a higher fixed asset turnover ratio is generally favorable as it signifies that the company is efficiently managing and utilizing its fixed assets to generate revenue. Ford's upward trend in fixed asset turnover in recent years indicates improvements in asset utilization and operational efficiency, which could positively impact its financial performance.