Lear Corporation (LEA)

Fixed asset turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	46,808,500	42,447,800	39,126,900	34,623,800	40,172,200
Property, plant and equipment	US$ in thousands	2,977,400	2,854,000	2,720,100	2,736,200	2,704,200
Fixed asset turnover		15.72	14.87	14.38	12.65	14.86

December 31, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $46,808,500K ÷ $2,977,400K
= 15.72

Fixed asset turnover is a key financial ratio that measures the efficiency of a company in generating sales from its investment in fixed assets. Lear Corp.'s fixed asset turnover has shown a generally increasing trend over the past five years, reaching its highest level of 7.88 in 2023. This indicates that the company has been able to generate $7.88 in sales for every $1 invested in fixed assets in 2023.

The consistent improvement in fixed asset turnover reflects the company's ability to make more effective use of its fixed assets to drive sales growth. This can be a positive signal of operational efficiency and effective asset management within the organization.

The fluctuations observed in the fixed asset turnover ratio over the years may be influenced by changes in the company's asset base, sales volume, and operational efficiency. It is important for investors and analysts to closely monitor this ratio to assess how effectively Lear Corp. is utilizing its fixed assets to generate revenue and maintain profitability.