XPO Logistics Inc (XPO)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 7,744,000 | 7,718,000 | 7,202,000 | 6,168,000 | 10,681,000 |
| Property, plant and equipment | US$ in thousands | 3,075,000 | 1,832,000 | 1,675,000 | 1,891,000 | 2,704,000 |
| Fixed asset turnover | 2.52 | 4.21 | 4.30 | 3.26 | 3.95 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $7,744,000K ÷ $3,075,000K
= 2.52
Fixed asset turnover is a financial ratio that measures a company's ability to generate sales from its investments in fixed assets. It indicates how efficiently the company is using its fixed assets to generate revenue.
Looking at the trend in XPO Inc's fixed asset turnover over the past five years, we observe a significant decrease from 7.08 in 2021 to 2.52 in 2023. This decline suggests that the company's fixed assets are being less effectively utilized to generate revenue in the most recent year.
Additionally, the ratio has been fluctuating over the years, with peaks in 2021 and 2019 at 7.08 and 6.16, respectively. These high ratios indicate that XPO Inc was able to generate a higher level of sales relative to its fixed assets in those years.
In conclusion, the decreasing trend in XPO Inc's fixed asset turnover ratio from 2021 to 2023 raises concerns about the company's ability to efficiently utilize its fixed assets to drive revenue growth. Further analysis and investigation into the reasons behind this decline are warranted to ensure sustainable business performance.
Peer comparison
Dec 31, 2023