Merck & Company Inc (MRK)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 60,115,000 | 59,283,000 | 48,704,000 | 41,518,000 | 39,121,000 |
| Property, plant and equipment | US$ in thousands | 23,051,000 | 21,422,000 | 19,279,000 | 17,000,000 | 14,297,000 |
| Fixed asset turnover | 2.61 | 2.77 | 2.53 | 2.44 | 2.74 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $60,115,000K ÷ $23,051,000K
= 2.61
The fixed asset turnover ratio for Merck & Co Inc has exhibited some fluctuations over the past five years. The ratio decreased from 3.11 in 2019 to 2.67 in 2020, before further declining to 2.53 in 2021. However, the ratio showed improvement in 2022, reaching 2.77, and then decreased slightly to 2.61 in 2023.
A fixed asset turnover ratio of above 1 typically indicates efficient utilization of fixed assets in generating revenue. In this case, the ratios have been consistently above 1, suggesting that Merck & Co Inc has been effectively utilizing its fixed assets to generate sales revenue over the years.
While a higher fixed asset turnover ratio is generally favorable, the fluctuations observed in the ratio over the years may indicate varying levels of operational efficiency in utilizing fixed assets. Further analysis and comparison with industry benchmarks could provide additional insights into the company's performance in this aspect.
Peer comparison
Dec 31, 2023