Valero Energy Corporation (VLO)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 144,216,000 | 175,864,000 | 113,250,000 | 64,912,000 | 108,324,000 |
| Property, plant and equipment | US$ in thousands | 28,014,000 | 28,700,000 | 29,001,000 | 28,767,000 | 29,264,000 |
| Fixed asset turnover | 5.15 | 6.13 | 3.91 | 2.26 | 3.70 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $144,216,000K ÷ $28,014,000K
= 5.15
The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. In the case of Valero Energy Corp., the trend in fixed asset turnover over the past five years has been fluctuating.
In 2023, Valero's fixed asset turnover ratio was 4.79, indicating that for every dollar of fixed assets, the company generated $4.79 in sales. This represents a decrease from the previous year, where the ratio was 5.69.
The significant decline in the fixed asset turnover ratio in 2023 compared to 2022 suggests that Valero may be experiencing challenges in efficiently utilizing its fixed assets to generate revenue. It's important for the company to investigate the reasons behind this decrease and take corrective actions to improve asset utilization efficiency.
Looking at the historical trend, Valero's fixed asset turnover peaked in 2019 at 3.70, then dropped in 2020 to 2.14, before recovering in 2021 to 3.69. This indicates some fluctuations in the company's ability to generate sales relative to its fixed asset base over the past five years.
In conclusion, while Valero Energy Corp. has shown varying levels of efficiency in utilizing its fixed assets to generate sales over the years, the recent decrease in fixed asset turnover ratio in 2023 suggests a potential area for improvement in operational efficiency and asset management.
Peer comparison
Dec 31, 2023