Laboratory Corporation of America Holdings (LH)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 12,161,600 | 11,863,900 | 16,120,900 | 13,978,500 | 11,554,800 |
| Property, plant and equipment | US$ in thousands | 2,911,800 | 2,794,100 | 2,815,400 | 2,729,600 | 2,636,600 |
| Fixed asset turnover | 4.18 | 4.25 | 5.73 | 5.12 | 4.38 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $12,161,600K ÷ $2,911,800K
= 4.18
The fixed asset turnover ratio for Laboratory Corp. Of America Holdings has shown some variability over the past five years. The ratio peaked in 2021 at 5.73 and decreased to 4.18 in 2023. This indicates that the company generated $4.18 in revenue for every dollar invested in fixed assets in 2023.
A high fixed asset turnover ratio generally suggests that the company is efficiently utilizing its fixed assets to generate sales. However, the decreasing trend in the ratio from 2021 to 2023 may indicate a potential decline in the effectiveness of the company's fixed asset utilization in generating revenue. This could be a cause for further investigation to identify the reasons behind this decline and to assess the company's asset management strategies.
In comparison to previous years, the fixed asset turnover ratios for 2022, 2020, and 2019 were relatively stable, ranging from 4.38 to 5.03. This suggests that the company had previously maintained a consistent level of efficiency in utilizing its fixed assets to generate revenue during those years.
Overall, the fluctuation in Laboratory Corp. Of America Holdings' fixed asset turnover ratio over the past five years indicates a changing trend in the company's efficiency in generating sales from its fixed assets, warranting a closer examination of its asset management practices and operational performance.
Peer comparison
Dec 31, 2023