Valaris Ltd (VAL)
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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 1,784,200 | 1,734,000 | 1,716,100 | 1,714,200 | 1,602,500 | 1,474,400 | 1,363,900 | 1,153,400 | 1,142,100 | 1,133,100 | 1,091,700 | 1,277,700 | 1,427,200 | 1,642,800 | 1,908,800 | 2,103,900 | 2,053,200 | 1,940,100 | 1,819,700 | 1,694,300 |
| Property, plant and equipment | US$ in thousands | 1,633,800 | 1,159,900 | 1,073,700 | 1,015,500 | 977,200 | 953,600 | 931,700 | 930,200 | 890,900 | 892,300 | 897,800 | 10,083,900 | 10,960,500 | 11,082,400 | 11,192,600 | 12,157,200 | 15,096,900 | 15,250,700 | 15,455,700 | 12,508,900 |
| Fixed asset turnover | 1.09 | 1.49 | 1.60 | 1.69 | 1.64 | 1.55 | 1.46 | 1.24 | 1.28 | 1.27 | 1.22 | 0.13 | 0.13 | 0.15 | 0.17 | 0.17 | 0.14 | 0.13 | 0.12 | 0.14 |
December 31, 2023 calculation
Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $1,784,200K ÷ $1,633,800K
= 1.09
The fixed asset turnover ratio measures how efficiently Valaris Ltd is utilizing its fixed assets to generate revenue. A higher ratio indicates better utilization of fixed assets.
Analyzing the trend of the fixed asset turnover over the past five quarters, we observe a decreasing trend from 1.69 in Q1 2023 to 1.09 in Q4 2023. This decline suggests a potential decline in the efficiency of Valaris Ltd in generating revenue from its fixed assets over time.
It is important for Valaris Ltd to closely monitor and assess the factors contributing to this decline in fixed asset turnover. Possible reasons could include underutilization of fixed assets, overvaluation of fixed assets on the balance sheet, or decreasing revenues. Management should analyze the root causes and take appropriate actions to improve the efficiency of utilizing fixed assets to drive revenue growth.
Peer comparison
Dec 31, 2023