Watsco Inc (WSO)
Total 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 |
| Total assets | US$ in thousands | 4,479,520 | 3,729,180 | 3,488,210 | 3,085,860 | 2,496,920 |
| Total asset turnover | 1.70 | 1.95 | 2.09 | 2.04 | 2.02 |
December 31, 2024 calculation
Total asset turnover = Revenue ÷ Total assets
= $7,618,320K ÷ $4,479,520K
= 1.70
Watsco Inc's total asset turnover has shown a positive trend over the past five years, increasing from 2.02 in December 31, 2020, to 1.70 in December 31, 2024. This indicates that the company's ability to generate sales from its total assets has slightly deteriorated over the period. Although there was a slight peak in 2022 at 2.09, the ratio decreased in the following years.
A total asset turnover ratio of less than 1 suggests that the company is not efficiently utilizing its assets to generate revenue. In this case, all values provided are above 1, signifying that Watsco Inc is utilizing its total assets effectively to generate sales. However, the declining trend from 2022 onwards may warrant further investigation into the company's operational efficiency and asset management strategies to ensure sustainable growth in the future.