Waters Corporation (WAT)

Fixed asset turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Revenue (ttm)	US$ in thousands	2,909,141	2,825,198	2,766,143	2,798,644	2,857,555	2,913,395	2,928,280	2,913,876	2,923,159	2,904,113	2,856,130	2,822,850	2,740,936	2,690,971	2,625,688	2,463,034	2,316,295	2,242,766	2,225,719	2,306,467
Property, plant and equipment	US$ in thousands	651,000	642,627	636,110	633,594	639,073	616,846	615,211	590,207	582,217	547,386	545,813	547,199	547,913	530,061	527,135	513,719	494,003	469,721	459,173	439,420
Fixed asset turnover		4.47	4.40	4.35	4.42	4.47	4.72	4.76	4.94	5.02	5.31	5.23	5.16	5.00	5.08	4.98	4.79	4.69	4.77	4.85	5.25

December 31, 2024 calculation

Fixed asset turnover = Revenue (ttm) ÷ Property, plant and equipment
= $2,909,141K ÷ $651,000K
= 4.47

Waters Corporation's fixed asset turnover ratio has exhibited fluctuations over the period from March 31, 2020, to December 31, 2024. The fixed asset turnover ratio measures how efficiently the company is utilizing its fixed assets to generate sales revenue.

The company's fixed asset turnover ratio started at 5.25 on March 31, 2020, indicating that for every dollar invested in fixed assets, Waters Corporation generated $5.25 in sales. The ratio then declined slightly to 4.85 in June 30, 2020, and continued to decrease in the subsequent quarters, reaching a low of 4.35 on June 30, 2024.

However, there were periods of improvement in the ratio as well. Notably, the fixed asset turnover ratio showed an upward trend from March 31, 2022, to September 30, 2022, where it increased from 5.16 to 5.31. This suggests that during this period, Waters Corporation managed to generate more revenue relative to its investment in fixed assets.

Overall, the fluctuations in the fixed asset turnover ratio may indicate changes in the efficiency of the company's operations and utilization of its fixed assets. A higher ratio is generally preferred as it signifies that the company is generating more revenue per dollar invested in fixed assets, showcasing operational efficiency. Conversely, a decreasing ratio may suggest inefficiencies or underutilization of fixed assets, prompting further analysis into the company's operational performance and asset management strategies.