Hertz Global Holdings Inc (HTZ)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 9,371,000 | 8,685,000 | 7,336,000 | 5,258,000 | 9,779,000 |
| Property, plant and equipment | US$ in thousands | 671,000 | 637,000 | 608,000 | 666,000 | 757,000 |
| Fixed asset turnover | 13.97 | 13.63 | 12.07 | 7.89 | 12.92 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $9,371,000K ÷ $671,000K
= 13.97
The fixed asset turnover ratio for Hertz Global Holdings Inc. has been decreasing over the past three years, indicating a decline in the efficiency of utilizing fixed assets to generate revenue. In 2021, the ratio was highest at 0.75, but it dropped to 0.66 in 2022 and further decreased to 0.61 in 2023.
A fixed asset turnover ratio below 1 suggests that the company is generating less revenue per dollar invested in fixed assets. This trend may indicate underutilization or inefficiency in managing fixed assets, leading to a negative impact on profitability.
Management should closely monitor and evaluate the company's asset utilization strategies to improve efficiency and profitability in the long term. Additionally, exploring ways to optimize the use of fixed assets or considering divestiture of underperforming assets could help improve the fixed asset turnover ratio in the future.
Peer comparison
Dec 31, 2023