Alphabet Inc Class C (GOOG)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 305,559,000 | 281,279,000 | 257,637,000 | 182,527,000 | 161,857,000 |
| Property, plant and equipment | US$ in thousands | 134,345,000 | 112,668,000 | 97,599,000 | 84,749,000 | 73,646,000 |
| Fixed asset turnover | 2.27 | 2.50 | 2.64 | 2.15 | 2.20 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $305,559,000K ÷ $134,345,000K
= 2.27
The fixed asset turnover ratio measures the efficiency with which Alphabet Inc generates revenue from its fixed assets. A higher fixed asset turnover ratio indicates that the company is able to generate more revenue per dollar invested in fixed assets.
From the data provided, we observe fluctuating trends in Alphabet Inc's fixed asset turnover ratio over the past five years. The ratio decreased from 2.20 in 2019 to 2.15 in 2020, suggesting a slight reduction in revenue generated from fixed assets during that period. However, the ratio then increased to 2.64 in 2021, indicating an improvement in the utilization of fixed assets to generate revenue.
Subsequently, the fixed asset turnover ratio decreased to 2.51 in 2022 and further to 2.29 in 2023. These declines may signify a potentially less efficient utilization of fixed assets in generating revenue in those years.
Overall, while the fixed asset turnover ratio has displayed some variability, it is important for Alphabet Inc to consistently monitor and optimize the utilization of its fixed assets to ensure efficient revenue generation and profitability in the long term.
Peer comparison
Dec 31, 2023