Notes on similarities, differences, and patterns you see across all companies, your ideas on potential explanations for these, and your recommendation on the best company to invest in.
Compute the fixed asset turnover ratios for the current and prior years and a description of what this tells you about the efficiency of the company’s use of their assets
- Suncor Energy Inc
Fixed asset turnover = Net Sales Revenue ÷ Average Net Fixed Assets
2019: [38,344,000,000 ÷ ((72,640,000,000+74,245,000,000) ÷ 2)] = 0.5
2018: [38,542,000,000 ÷ ((74,245,000,000+73,493,000,000) ÷ 2)] = 0.5
Suncor has maintained the same efficiency from 2018 to 2019 at generating sales from the use of its assets.
- Amplify Energy Corp
| Particulars |
2019 |
2018 |
| Net fixed assets |
553469 |
574462 |
| Sales revenue |
247607 |
339840 |
| Fixed assets turnover ratio |
0.45 |
0.59 |
The fixed assets turnover ratio has been declined from 0.59 to 0.45 times which shows that the organization is not utilizing its assets efficiently to generate revenue and the efficiency has been declined in year 2019 as compared to year 2018.
- Ultra Petroleum Corporation
2019
Net Revenue = $742,032 thousand
Fixed Assets = (9,779+ 11,635)/2 = $10,707 thousand
Fixed asset turnover ratio = 69.3
The fixed asset turnover ratio tells you that for every dollar invested in PP&E, there is $69.30 produced in revenue.
2018
Net Revenue= $829,499 thousand
Fixed Assets= (11,635+ 9,469)/2 =$10,552 thousand
Fixed Asset Turnover Ratio= 78.6
In 2018, for every dollar invested in PP&E, $78.60 was produced in revenue. The 2018 year produced a higher ration than 2019, meaning that the fixed assets were creating more revenue.
- Nabors Industries Ltd
Fixed Asset Turnover Ratio = Net Sales Revenue ÷ Average Net Fixed Assets
2019: Net Sales Revenue; $3,053,596,000
2019: Fixed Assets; $3,754,524,000
Fixed Asset Turnover Ratio: 81.3
2018: Net Sales Revenue; $3,057,619,000
2018: Fixed Assets; $3,217,203,000
Fixed Asset Turnover Ratio: 95
2018 produced a higher ratio then 2019, as more assets were creating more revenue at the time.
