Organon & Co (OGN)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Revenue | US$ in thousands | 6,263,000 | 6,174,000 | 6,304,000 |
| Property, plant and equipment | US$ in thousands | 1,183,000 | 1,018,000 | 973,000 |
| Fixed asset turnover | 5.29 | 6.06 | 6.48 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $6,263,000K ÷ $1,183,000K
= 5.29
The fixed asset turnover ratio is a measure of how efficiently a company generates sales revenue from its investment in fixed assets. A higher fixed asset turnover ratio indicates that the company is generating more sales per dollar of investment in fixed assets.
Looking at the trend of Organon & Co.'s fixed asset turnover over the past five years, we can observe a decreasing trend. The fixed asset turnover has decreased from 11.44 in 2019 to 5.29 in 2023. This decline suggests that the company may be becoming less efficient in generating sales revenue from its fixed assets over time.
A possible explanation for this trend could be an increase in the company's investment in fixed assets without a proportional increase in sales revenue. This could indicate that the company's fixed assets are not being utilized as effectively as in previous years.
Further investigation into the reasons behind the declining fixed asset turnover would be necessary to determine the underlying causes and to identify potential strategies for improving efficiency in utilizing fixed assets to generate sales revenue.
Peer comparison
Dec 31, 2023