United Parcel Service Inc (UPS)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 90,120,000 | 99,706,000 | 96,557,000 | 83,936,000 | 73,435,000 |
| Property, plant and equipment | US$ in thousands | 36,089,000 | 34,719,000 | 33,475,000 | 32,254,000 | 30,482,000 |
| Fixed asset turnover | 2.50 | 2.87 | 2.88 | 2.60 | 2.41 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $90,120,000K ÷ $36,089,000K
= 2.50
United Parcel Service, Inc.'s fixed asset turnover ratio has shown fluctuations over the past five years. The ratio decreased from 2.91 in 2021 to 2.62 in 2020 before experiencing a slight increase to 2.89 in 2022. However, in 2023, the fixed asset turnover ratio decreased further to 2.46.
A fixed asset turnover ratio of 2.46 in 2023 indicates that for every dollar invested in fixed assets, United Parcel Service generated $2.46 in revenue. Although the ratio has decreased compared to the previous year, the company is still efficiently utilizing its fixed assets to generate revenue.
It is essential for United Parcel Service to continue monitoring and potentially optimizing its fixed asset utilization to improve efficiency and profitability in the long run.