RXO Inc. (RXO)
Total asset turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,550,000 | 3,927,000 | 4,796,000 | 4,689,000 | 3,357,000 |
| Total assets | US$ in thousands | 3,414,000 | 1,825,000 | 2,038,000 | 2,068,000 | 1,870,000 |
| Total asset turnover | 1.33 | 2.15 | 2.35 | 2.27 | 1.80 |
December 31, 2024 calculation
Total asset turnover = Revenue ÷ Total assets
= $4,550,000K ÷ $3,414,000K
= 1.33
The total asset turnover ratio measures a company's ability to generate sales in relation to its total assets. Looking at the trend for RXO Inc. over the years, we see an increase in total asset turnover from 1.80 in December 31, 2020, to 2.27 in December 31, 2021, further increasing to 2.35 in December 31, 2022. This indicates that the company is becoming more efficient in utilizing its assets to generate revenue.
However, there seems to be a slight decline in the total asset turnover ratio in December 31, 2023, dropping to 2.15. It is essential to investigate the reasons behind this decrease, as it may indicate potential inefficiencies in asset utilization during that period. The following year, the ratio significantly dropped to 1.33 in December 31, 2024, raising concerns about the company's ability to generate sales relative to its total assets efficiently.
In conclusion, while RXO Inc. demonstrated an overall improvement in asset turnover efficiency in the earlier years, the substantial decline in the most recent year calls for a deeper analysis to understand the factors driving this trend and to identify potential areas for improvement in asset utilization.
Peer comparison
Dec 31, 2024