Ovintiv Inc (OVV)
Fixed asset turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 10,883,000 | 10,929,000 | 11,829,000 | 13,048,000 | 12,464,000 | 12,591,000 | 10,831,000 | 8,787,000 | 8,658,000 | 6,847,000 | 6,248,000 | 5,282,000 | 6,087,000 | 6,124,000 | |||
| Property, plant and equipment | US$ in thousands | 14,640,000 | 14,515,000 | 14,217,000 | 9,911,000 | 9,468,000 | 9,053,000 | 9,194,000 | 8,983,000 | 8,761,000 | 8,590,000 | 8,535,000 | 9,514,000 | 9,450,000 | 10,223,000 | 11,636,000 | 15,080,000 | 15,191,000 |
| Fixed asset turnover | 0.74 | 0.75 | 0.83 | 1.32 | 1.32 | 1.39 | 1.18 | 0.98 | 0.99 | 0.80 | 0.73 | 0.56 | 0.64 | 0.60 |
December 31, 2023 calculation
Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $10,883,000K ÷ $14,640,000K
= 0.74
The fixed asset turnover ratio measures the efficiency of a company in generating revenue from its investment in fixed assets. A higher ratio indicates that the company is effectively utilizing its fixed assets to generate sales.
Ovintiv Inc's fixed asset turnover ratio has fluctuated over the past eight quarters. In Q4 2023, the ratio decreased to 0.74 from 0.75 in Q3 2023, suggesting a slight decrease in the company's ability to generate sales from its fixed assets. This could indicate potential inefficiencies in asset utilization or declining sales relative to its fixed asset base.
Comparing Q4 2023 with the same quarter in the previous year (Q4 2022), we see a decrease from 1.31 to 0.74. This significant decline may raise concerns about the company's ability to generate revenue efficiently from its fixed assets over the year.
Looking at the trend over the past eight quarters, we observe that the fixed asset turnover ratio peaked at 1.38 in Q3 2022 and has since been trending downward. This downward trend may suggest challenges in optimizing the utilization of fixed assets to drive sales growth.
Further analysis and comparison with industry benchmarks would be necessary to understand the reasons behind the fluctuations in Ovintiv Inc's fixed asset turnover ratio and to assess its overall efficiency in generating revenue from its investment in fixed assets.
Peer comparison
Dec 31, 2023