Alphabet Inc. (NASDAQ:GOOG)

A consistent downward trend is observed across all presented investment activity ratios over the analyzed period, spanning from March 31, 2022, to December 31, 2025. This suggests a decreasing efficiency in utilizing assets to generate revenue. The rate of decline appears to accelerate in the later periods, particularly from March 31, 2024, onwards.

Net Fixed Asset Turnover

The net fixed asset turnover ratio exhibits a steady decline, decreasing from 2.59 in March 2022 to 1.63 in December 2025. This indicates that the company is generating less revenue for each dollar invested in fixed assets. The rate of decrease becomes more pronounced in the latter half of the period, suggesting a potential issue with asset utilization or a shift in business strategy.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

Similar to the standard net fixed asset turnover, this ratio also demonstrates a consistent downward trajectory, moving from 2.31 in March 2022 to 1.54 in December 2025. The inclusion of operating lease and right-of-use assets does not alter the overall trend; however, the values are consistently lower than the standard net fixed asset turnover, indicating that lease obligations contribute to a lower overall asset efficiency when considered. The acceleration in decline mirrors that of the standard ratio.

Total Asset Turnover

The total asset turnover ratio shows a gradual decrease from 0.76 in March 2022 to 0.68 in December 2025. This implies that the company is becoming less efficient in utilizing all of its assets, both fixed and current, to generate sales. While the decline is less steep than that of the fixed asset turnover ratios, it reinforces the broader trend of decreasing asset efficiency. A slight fluctuation is observed around December 2023, but the overall trend remains downward.

Equity Turnover

The equity turnover ratio declines from 1.06 in March 2022 to 0.97 in December 2025. This indicates that the company is generating less revenue for each dollar of equity invested. The rate of decline is relatively consistent throughout the period, although it appears to slightly accelerate towards the end of the observed timeframe. This suggests a potential decrease in the return on equity or an increase in the equity base without a corresponding increase in revenue.

Collectively, these ratios suggest a weakening trend in asset utilization efficiency. Further investigation is warranted to determine the underlying causes of these declines, which could include factors such as increased competition, changes in industry dynamics, strategic shifts in investment, or inefficiencies in operational processes.

The net fixed asset turnover ratio demonstrates a consistent downward trend over the observed period, spanning from March 31, 2022, to December 31, 2025. Initially, the ratio fluctuated within a relatively narrow range, but the rate of decline accelerated in later periods.

Overall Trend

A clear declining trend is evident in the net fixed asset turnover ratio. The ratio decreased from 2.59 in March 2022 to 1.63 by December 2025, representing a substantial reduction in the efficiency with which fixed assets are generating revenue.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

During this timeframe, the ratio exhibited minor fluctuations, beginning at 2.59 and concluding at 2.29. While a slight decrease is present, the changes were relatively contained, suggesting a stable relationship between revenues and net fixed assets.

Transitional Period (Mar 31, 2023 – Dec 31, 2023)

The rate of decline became more pronounced during this period, moving from 2.42 to 2.05. This suggests a weakening correlation between revenue generation and the company’s investment in fixed assets.

Accelerated Decline (Mar 31, 2024 – Dec 31, 2025)

The most significant decrease occurred in the latter part of the observed period. The ratio fell from 2.22 in March 2024 to 1.63 in December 2025. This accelerated decline indicates a growing inefficiency in utilizing fixed assets to generate sales. The increase in property and equipment, net, did not keep pace with revenue growth during this period.

Revenue and Asset Relationship

Revenues increased over the period, but the growth in property and equipment, net, outpaced revenue growth, particularly in the later quarters. This disparity is the primary driver of the declining net fixed asset turnover ratio. The company is investing more in fixed assets relative to the revenue those assets are generating.

The consistent downward trend in the net fixed asset turnover ratio warrants further investigation. Potential factors contributing to this trend could include overinvestment in fixed assets, underutilization of existing assets, or a shift in business strategy that requires a larger asset base to support future revenue generation.

The net fixed asset turnover ratio, calculated using property and equipment inclusive of operating leases and right-of-use assets, demonstrates a consistent downward trend over the observed period spanning from March 31, 2022, to December 31, 2025. Initially, the ratio fluctuated around 2.30, but progressively declined to 1.54 by the end of the analyzed timeframe.

Overall Trend

A clear declining trend is evident in the net fixed asset turnover ratio. The ratio decreased from 2.31 in March 2022 to 1.54 in December 2025, representing a substantial reduction over the period. This suggests a decreasing efficiency in generating revenue from its fixed asset base.

Short-Term Fluctuations (2022-2023)

From March 2022 to December 2022, the ratio experienced a moderate decrease, moving from 2.31 to 2.07. The decline accelerated in 2023, falling from 2.16 in March to 1.71 in June, and continuing to 1.62 in September and 1.54 in December. This indicates a more pronounced reduction in asset efficiency during this period.

Long-Term Decline (2024-2025)

The downward trend persisted throughout 2024 and 2025. The ratio decreased from 1.90 in March 2024 to 1.54 in December 2025. The rate of decline appears relatively consistent during this phase, suggesting a sustained shift in the relationship between revenue and fixed assets.

Revenue and Asset Relationship

While revenues generally increased over the period, the growth in revenue did not keep pace with the growth in net fixed assets (including operating leases and right-of-use assets). This disparity is the primary driver of the declining net fixed asset turnover ratio. The increasing asset base, coupled with relatively slower revenue growth, resulted in a lower ratio.

The consistent decrease in the net fixed asset turnover ratio warrants further investigation to understand the underlying causes. Potential factors could include increased investment in long-term assets without a corresponding increase in revenue, changes in asset utilization, or shifts in business strategy.

The total asset turnover ratio for the analyzed period demonstrates a generally stable, albeit slightly declining, trend. Initially, the ratio fluctuated between 0.76 and 0.79 for the first eight quarters. However, a noticeable downward trend emerges in the latter half of the period, culminating in a ratio of 0.68 in the final quarter.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

The ratio exhibited relative stability, ranging from 0.76 to 0.79. This suggests a consistent level of revenue generation relative to the asset base during this timeframe. A slight increase is observed from 0.76 in March 2022 to 0.79 in September 2022, followed by a minor decrease to 0.77 in December 2022.

Transitional Phase (Mar 31, 2023 – Dec 31, 2023)

The ratio remained largely consistent with the prior period, fluctuating between 0.76 and 0.79. This indicates that the company maintained its efficiency in utilizing assets to generate revenue. A slight dip to 0.76 is seen in March 2023 and June 2023, but it recovers to 0.79 by December 2023.

Declining Trend (Mar 31, 2024 – Dec 31, 2025)

A clear downward trend is evident. The ratio decreased from 0.78 in March 2024 to 0.68 in December 2025. This suggests a diminishing ability to generate revenue for each dollar of assets held. The decline accelerates in the latter quarters, with a drop from 0.76 in March 2025 to 0.68 in December 2025. This warrants further investigation into potential causes, such as slower revenue growth relative to asset increases, or inefficient asset management.

Revenue and Asset Relationship

While revenues generally increased over the period, the rate of asset growth appears to have outpaced revenue growth in the latter half of the analyzed timeframe. This disparity is a primary driver of the observed decline in the total asset turnover ratio. The increasing asset base, without a proportional increase in revenue, contributes to lower efficiency in asset utilization.

In summary, the total asset turnover ratio indicates a gradual decrease in efficiency over the analyzed period. While the initial quarters showed stability, the latter quarters demonstrate a concerning trend of declining asset utilization, potentially signaling a need for strategic review of asset management practices and revenue generation strategies.

The equity turnover ratio for the analyzed period demonstrates a generally stable, albeit slightly declining, trend. Initially, the ratio exhibited a modest increase before stabilizing and then experiencing a gradual decrease towards the end of the observed timeframe.

Overall Trend

The equity turnover ratio began at 1.06 and fluctuated within a narrow range between 1.08 and 1.11 for the first nine quarters. A consistent downward trend became apparent in the latter half of the period, culminating in a ratio of 0.97 in the final quarter.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

During this period, the ratio showed a slight upward movement, peaking at 1.11 in September 2022, before settling back to 1.10 in December 2022. This suggests a relatively consistent level of revenue generation relative to stockholders’ equity during this timeframe.

Stabilization Phase (Mar 31, 2023 – Dec 31, 2023)

From March 2023 through December 2023, the ratio remained remarkably stable, hovering around 1.09. This indicates a consistent relationship between revenues and equity, with no significant changes in operational efficiency or capital structure during this period.

Declining Trend (Mar 31, 2024 – Dec 31, 2025)

The final five quarters witnessed a clear downward trend. The ratio decreased from 1.09 in March 2024 to 0.97 in December 2025. This decline suggests that the company is generating less revenue for each dollar of stockholders’ equity compared to earlier periods. This could be due to several factors, including slower revenue growth, increased equity levels, or a combination of both.

Magnitude of Change

The overall decrease from the initial value of 1.06 to the final value of 0.97 represents a roughly 8.5% reduction in equity turnover over the entire period. While not a dramatic shift, the consistent downward trajectory warrants further investigation to understand the underlying drivers.

In summary, the equity turnover ratio indicates a stable, but ultimately decreasing, efficiency in utilizing stockholders’ equity to generate revenue. The observed decline in the latter part of the period suggests a potential shift in the company’s operational dynamics or capital structure that merits further scrutiny.