Goodyear Tire & Rubber Co (GT)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 19,457,000 | 20,353,000 | 17,073,000 | 11,987,000 | 14,442,000 |
| Property, plant and equipment | US$ in thousands | 8,284,000 | 19,471,000 | 19,275,000 | 17,862,000 | 17,487,000 |
| Fixed asset turnover | 2.35 | 1.05 | 0.89 | 0.67 | 0.83 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $19,457,000K ÷ $8,284,000K
= 2.35
Fixed asset turnover measures how efficiently a company generates sales revenue from its investments in fixed assets. A higher fixed asset turnover ratio indicates that the company is making more productive use of its fixed assets.
Analyzing Goodyear Tire & Rubber Co.'s fixed asset turnover over the past five years, we observe fluctuations in the ratio. In 2023, the fixed asset turnover ratio decreased to 2.36 from 2.51 in 2022, showing a slight decline in the company's ability to generate sales from its fixed assets. However, the ratio remains relatively strong, indicating that the company is efficient in utilizing its assets to generate revenue.
Comparing Goodyear's fixed asset turnover to prior years, we note a significant improvement from 2018 to 2019, followed by fluctuations in subsequent years. The company's fixed asset turnover peaked in 2022 at 2.51 before declining slightly in 2023. Despite the fluctuations, Goodyear has generally maintained a healthy fixed asset turnover ratio, reflecting efficient utilization of its fixed assets to drive sales.
Further analysis of the underlying reasons behind the variations in fixed asset turnover could provide insights into Goodyear's operational efficiency and asset management strategies. Such analysis could help investors and stakeholders understand how effectively the company is leveraging its fixed assets to generate revenue and create value.