Liberty Oilfield Services Inc (LBRT)

Fixed asset turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	4,747,930	4,149,230	2,470,780	965,787	1,990,350
Property, plant and equipment	US$ in thousands	1,645,370	1,362,360	1,199,290	1,120,950	651,703
Fixed asset turnover		2.89	3.05	2.06	0.86	3.05

December 31, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $4,747,930K ÷ $1,645,370K
= 2.89

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate revenue. A higher fixed asset turnover ratio indicates better efficiency in generating sales from investments in fixed assets.

Analyzing the trend of Liberty Energy Inc's fixed asset turnover over the past five years, the ratio fluctuated notably. In 2019, the ratio was 3.05, indicating that the company generated $3.05 in sales for every $1 invested in fixed assets. Subsequently, in 2020, the ratio dropped to 0.86, suggesting a decrease in efficiency in utilizing fixed assets to generate revenue.

However, in the following years, there was a significant improvement in the fixed asset turnover ratio. In 2021, the ratio increased to 2.06, indicating a moderate efficiency in generating sales from fixed assets. Subsequently, in 2022, the ratio further improved to 3.05, reaching the same level as in 2019, showcasing a return to high efficiency in utilizing fixed assets.

In 2023, the fixed asset turnover ratio slightly decreased to 2.89. Despite the minor decline, the ratio remains relatively high, suggesting that Liberty Energy Inc continues to efficiently utilize its fixed assets to generate revenue.

Overall, the analysis of Liberty Energy Inc's fixed asset turnover ratio indicates fluctuations over the years, with notable improvements in efficiency in some periods. It is essential for the company to maintain or further improve this ratio to ensure optimal utilization of its fixed assets for revenue generation.