Teradyne Inc (TER)

Fixed asset turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	2,676,300	3,155,040	3,702,880	3,121,470	2,294,960
Property, plant and equipment	US$ in thousands	445,492	418,683	387,240	394,800	320,216
Fixed asset turnover		6.01	7.54	9.56	7.91	7.17

December 31, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $2,676,300K ÷ $445,492K
= 6.01

Fixed asset turnover measures how efficiently a company is using its fixed assets to generate revenue. Teradyne, Inc.'s fixed asset turnover has displayed fluctuations over the past five years. In 2023, the fixed asset turnover ratio was 6.01, lower than the previous year's ratio of 7.54. This indicates that the company generated $6.01 in revenue for every dollar invested in fixed assets in 2023, reflecting a decrease in asset utilization efficiency compared to the prior year.

Looking at the trend over the past five years, there have been instances of fluctuation in the fixed asset turnover ratio. The ratio peaked at 9.56 in 2021, indicating that the company was more efficient in utilizing its fixed assets to generate revenue during that period. However, in 2020 and 2019, the ratios were 7.91 and 7.17, respectively, showing a slightly lower efficiency in asset utilization during those years compared to the peak year of 2021.

Overall, while there have been fluctuations in the fixed asset turnover ratio for Teradyne, Inc. over the past five years, the company has generally demonstrated a reasonable level of efficiency in utilizing its fixed assets to generate revenue. Further analysis and consideration of other factors would be needed to fully evaluate the company's asset management effectiveness.