Meta Platforms Inc. (META)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 134,090,000 | 116,352,000 | 117,774,000 | 85,822,000 | 70,572,000 |
| Property, plant and equipment | US$ in thousands | 96,587,000 | 79,518,000 | 57,809,000 | 45,633,000 | 35,323,000 |
| Fixed asset turnover | 1.39 | 1.46 | 2.04 | 1.88 | 2.00 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $134,090,000K ÷ $96,587,000K
= 1.39
Fixed asset turnover measures how efficiently a company generates sales revenue from its investment in fixed assets. A higher fixed asset turnover indicates that the company is generating more sales relative to its investment in property, plant, and equipment. Looking at Meta Platforms Inc's fixed asset turnover over the past five years, we can see a decreasing trend.
In 2021, Meta Platforms Inc had a fixed asset turnover of 2.04, indicating that the company generated $2.04 in sales for every dollar invested in fixed assets. However, this ratio decreased to 1.40 in 2023, suggesting that the company's efficiency in utilizing its fixed assets to generate sales revenue has declined.
It's important to further investigate the reason behind this decline in fixed asset turnover. It could be due to various factors such as slowing sales growth, overinvestment in fixed assets, or inefficiencies in asset utilization. Management should closely monitor and address these issues to improve the company's efficiency in utilizing its fixed assets.
Peer comparison
Dec 31, 2023