GXO Logistics Inc (GXO)

Fixed asset turnover

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021
Revenue (ttm)	US$ in thousands	9,725,000	9,604,000	9,428,000	9,195,000	8,964,000	8,764,000	8,452,000	8,181,000
Property, plant and equipment	US$ in thousands	846,000	812,000	841,000	839,000	837,000	791,000	760,000	697,000	708,000	688,000	838,000
Fixed asset turnover		11.50	11.83	11.21	10.96	10.71	11.08	11.12	11.74

December 31, 2023 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $9,725,000K ÷ $846,000K
= 11.50

The fixed asset turnover ratio measures how efficiently GXO Logistics Inc generates revenue from its investment in fixed assets. In the most recent quarter, Q4 2023, the fixed asset turnover was 10.26, indicating that the company generated $10.26 in revenue for every dollar invested in fixed assets during that period. This represents a slight decrease from the previous quarter but remains relatively high compared to historical values.

Consistently high fixed asset turnover ratios demonstrate that the company is effectively utilizing its fixed assets to generate sales. However, it is important to note that a very high fixed asset turnover ratio could also indicate that the company may be underinvesting in fixed assets, potentially affecting long-term growth and competitiveness. On the other hand, a low ratio may suggest inefficiencies in asset usage or overinvestment in fixed assets.

It is essential for GXO Logistics Inc to strike a balance in managing its fixed assets to optimize revenue generation while ensuring sustainable growth and operational efficiency. Monitoring changes in the fixed asset turnover ratio over time can provide insights into the company's asset utilization and operational effectiveness.