Zoetis Inc (ZTS)
Fixed asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 8,544,000 | 8,080,000 | 7,776,000 | 6,675,000 | 6,260,000 |
| Property, plant and equipment | US$ in thousands | 3,204,000 | 2,753,000 | 2,422,000 | 2,202,000 | 1,940,000 |
| Fixed asset turnover | 2.67 | 2.93 | 3.21 | 3.03 | 3.23 |
December 31, 2023 calculation
Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $8,544,000K ÷ $3,204,000K
= 2.67
Fixed asset turnover is a financial ratio that measures a company's ability to generate revenue from its investment in fixed assets. It indicates how efficiently the company is utilizing its fixed assets to generate sales.
Analyzing Zoetis Inc's fixed asset turnover over the past five years, we observe a declining trend from 3.23 in 2019 to 2.67 in 2023. This signifies that the company is generating less revenue for each dollar invested in fixed assets.
A lower fixed asset turnover ratio could suggest inefficiencies in asset utilization, underutilization of fixed assets, or potential overinvestment in fixed assets relative to sales. It is important for Zoetis Inc to address these issues to improve efficiency and profitability.
It is recommended that Zoetis Inc closely monitor its fixed asset turnover ratio and evaluate its asset utilization strategies to optimize the efficiency of its fixed assets in generating sales.
Peer comparison
Dec 31, 2023