Resideo Technologies Inc (REZI)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 6,177,000 | 6,308,000 | 5,786,000 | 10,080,000 | 9,917,000 |
| Property, plant and equipment | US$ in thousands | 390,000 | 366,000 | 287,000 | 318,000 | 316,000 |
| Fixed asset turnover | 15.84 | 17.23 | 20.16 | 31.70 | 31.38 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $6,177,000K ÷ $390,000K
= 15.84
The fixed asset turnover ratio measures how efficiently a company is generating revenue from its investment in fixed assets. A higher fixed asset turnover ratio indicates that the company is utilizing its fixed assets more efficiently to generate sales.
Based on the data provided for Resideo Technologies Inc over the past five years, we observe fluctuations in the fixed asset turnover ratio. The ratio was 15.78 in 2019, increased to 20.37 in 2021, decreased to 15.95 in 2020, further decreased to 17.40 in 2022, and then decreased again to 16.01 in 2023.
The significant increase in fixed asset turnover from 2019 to 2021 suggests that Resideo was able to generate more revenue from its fixed assets during that period. However, the subsequent decrease in 2022 and 2023 indicates a decline in efficiency in utilizing fixed assets to generate sales.
It is important for Resideo Technologies Inc to carefully monitor and analyze the factors affecting its fixed asset turnover ratio to ensure optimal utilization of assets and maximize revenue generation. Periodic reviews and adjustments to operational strategies may be necessary to improve efficiency in this area.