Universal Display (OLED)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 576,429 | 616,619 | 553,525 | 428,867 | 405,177 |
| Property, plant and equipment | US$ in thousands | 175,150 | 143,445 | 128,832 | 102,113 | 87,872 |
| Fixed asset turnover | 3.29 | 4.30 | 4.30 | 4.20 | 4.61 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $576,429K ÷ $175,150K
= 3.29
The fixed asset turnover ratio of Universal Display Corp. has shown a declining trend over the past five years. In 2019, the ratio was at its highest at 4.61, indicating that the company generated $4.61 in revenue for every dollar invested in fixed assets. However, this ratio has steadily decreased over the subsequent years, reaching 4.30 in 2022 and 2021, and further dropping to 4.20 in 2020 and 3.29 in 2023.
A decreasing fixed asset turnover ratio can signal inefficiencies in the utilization of fixed assets to generate sales. It may indicate that the company is not effectively leveraging its investments in property, plant, and equipment to generate revenue. This could be a cause for concern as it suggests that the company's fixed assets are not being efficiently utilized to drive revenue growth.
Further analysis and investigation into the reasons behind the declining fixed asset turnover ratio are warranted to assess the company's operational efficiency and effectiveness in managing its fixed assets.
Peer comparison
Dec 31, 2023