Netflix Inc (NFLX)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 33,723,300 | 31,615,600 | 29,697,800 | 24,996,100 | 20,156,400 |
| Property, plant and equipment | US$ in thousands | 1,491,440 | 1,398,260 | 1,323,450 | 960,183 | 565,221 |
| Fixed asset turnover | 22.61 | 22.61 | 22.44 | 26.03 | 35.66 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $33,723,300K ÷ $1,491,440K
= 22.61
The fixed asset turnover ratio measures the efficiency with which a company generates sales revenue from its investment in fixed assets. A higher ratio indicates better utilization of fixed assets to generate sales. The trend for Netflix Inc.'s fixed asset turnover shows consistency, with figures ranging from 22.44 to 35.66 over the past five years. The ratio decreased in 2021 but remained relatively stable in 2022 and 2023. This suggests that Netflix has been consistently effective in utilizing its fixed assets to drive revenue, although there was a slight reduction in efficiency in 2021. Further analysis of the company's investment in fixed assets and its revenue generation strategies would provide additional insights into the factors affecting this trend.