Watsco Inc (WSO)
Fixed asset turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 7,618,320 | 7,283,770 | 7,274,340 | 6,280,190 | 5,054,930 |
| Property, plant and equipment | US$ in thousands | — | — | 442,738 | 111,019 | 98,225 |
| Fixed asset turnover | — | — | 16.43 | 56.57 | 51.46 |
December 31, 2024 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $7,618,320K ÷ $—K
= —
The fixed asset turnover ratio measures the efficiency with which a company generates sales revenue from its investment in fixed assets. Looking at the data provided for Watsco Inc, there has been a fluctuation in the fixed asset turnover ratio over the years.
In December 31, 2020, the fixed asset turnover ratio stood at 51.46, indicating that for every dollar invested in fixed assets, Watsco generated $51.46 in sales. This high ratio suggests a high level of efficiency in utilizing its fixed assets to generate revenue.
By December 31, 2021, the fixed asset turnover ratio further increased to 56.57, implying an improvement in efficiency in generating sales from fixed assets. This could be seen as a positive trend, indicating that the company is making better use of its fixed assets to drive revenue growth.
However, there was a significant decrease in the fixed asset turnover ratio to 16.43 by December 31, 2022. This sharp decline may raise concerns about the company's ability to efficiently utilize its fixed assets to generate sales, warranting further investigation into the factors contributing to this decrease.
Furthermore, the data for December 31, 2023, and December 31, 2024, are not available (indicated as "—"). It is important for stakeholders to obtain more recent information to assess the trajectory of Watsco Inc's fixed asset turnover ratio and its implications for the company's operational efficiency and financial performance.