Watsco Inc (WSO)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 7,283,770 | 7,274,340 | 6,280,190 | 5,054,930 | 4,770,360 |
| Property, plant and equipment | US$ in thousands | 136,230 | 125,424 | 111,019 | 98,225 | 98,523 |
| Fixed asset turnover | 53.47 | 58.00 | 56.57 | 51.46 | 48.42 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $7,283,770K ÷ $136,230K
= 53.47
The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate revenue. A higher fixed asset turnover ratio indicates that the company is generating more revenue for each dollar of fixed assets it owns.
Analyzing Watsco Inc.'s fixed asset turnover over the past five years, we observe a generally increasing trend from 48.42 in December 2019 to 53.47 in December 2023. This indicates that the company has been more effective in utilizing its fixed assets to generate revenue over the period.
In 2023, Watsco Inc. achieved a fixed asset turnover ratio of 53.47, which implies that the company generated $53.47 in revenue for each dollar of fixed assets owned during the year. Comparing this with the ratios from the previous years, we see consistent improvement in the efficiency of fixed asset utilization.
Overall, the trend of increasing fixed asset turnover suggests that Watsco Inc. has been managing its fixed assets efficiently to drive revenue growth, which is a positive indicator of operational performance and asset utilization efficiency.