Diamondback Energy Inc (FANG)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 8,412,000 | 9,643,000 | 6,797,000 | 2,813,000 | 3,964,000 |
| Property, plant and equipment | US$ in thousands | 26,674,000 | 23,759,000 | 20,619,000 | 16,214,000 | 21,835,000 |
| Fixed asset turnover | 0.32 | 0.41 | 0.33 | 0.17 | 0.18 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $8,412,000K ÷ $26,674,000K
= 0.32
The fixed asset turnover ratio measures how efficiently a company generates revenue from its investment in fixed assets. A higher ratio indicates better utilization of fixed assets to generate sales.
Diamondback Energy Inc's fixed asset turnover has fluctuated over the past five years, ranging from 0.17 to 0.40. The ratio decreased from 0.40 in 2022 to 0.31 in 2023, indicating a decline in the company's ability to generate revenue from its fixed assets. However, it is worth noting that the ratio remains relatively stable around the 0.30 mark over the years.
The decreasing trend in fixed asset turnover could suggest either slower growth in sales compared to the growth in fixed assets or underutilization of fixed assets. Further insight into the company's operational efficiency, asset management, and sales growth is needed to fully understand the implications of the fixed asset turnover ratio trends.
Peer comparison
Dec 31, 2023