Genuine Parts Co (GPC)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 23,026,100 | 22,227,700 | 18,747,300 | 16,432,400 | 19,255,100 |
| Property, plant and equipment | US$ in thousands | 1,616,780 | 1,326,010 | 1,234,400 | 1,162,040 | 1,173,690 |
| Fixed asset turnover | 14.24 | 16.76 | 15.19 | 14.14 | 16.41 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $23,026,100K ÷ $1,616,780K
= 14.24
Fixed asset turnover measures the efficiency with which Genuine Parts Co. utilizes its fixed assets to generate sales revenue. A higher fixed asset turnover indicates that the company is generating more revenue per dollar invested in fixed assets.
Analyzing Genuine Parts Co.'s fixed asset turnover over the past five years, we observe fluctuations in the ratio. In 2023, the fixed asset turnover stood at 14.28, a decrease from the previous year's ratio of 16.66 in 2022. This suggests that the company generated $14.28 in sales for every dollar invested in fixed assets in 2023.
Despite the slight decrease in 2023, the company's fixed asset turnover has generally been relatively high over the past five years, ranging from 14.23 to 16.66. This indicates that Genuine Parts Co. has efficiently utilized its fixed assets to generate sales revenue during this period.
However, it is crucial to consider other factors alongside fixed asset turnover to assess the overall financial health and performance of the company. Additional analysis of the company's profitability, liquidity, and solvency ratios would provide a more comprehensive understanding of Genuine Parts Co.'s financial position and operational efficiency.