Charter Communications Inc. (NASDAQ:CHTR)

Net Fixed Asset Turnover

The net fixed asset turnover ratio exhibits a general upward trend from 1.32 in 2019 to a peak of 1.51 in 2021, indicating improved efficiency in generating sales from fixed assets during this period. However, a slight decline is observed in subsequent years, dropping to 1.38 by 2023, suggesting a marginal reduction in asset utilization efficiency.

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

This adjusted measure follows a similar pattern to the standard net fixed asset turnover ratio. It increases from 1.28 in 2019 to a high of 1.45 in 2021 and 2022, before declining to 1.34 in 2023. The inclusion of right-of-use assets and operating leases slightly lowers the turnover values compared to the standard ratio but reflects consistent trends over time.

Total Asset Turnover

The total asset turnover ratio shows a steady incremental increase from 0.31 in 2019 to 0.37 in both 2022 and 2023. This progression indicates a gradual improvement in the company’s ability to generate revenue from its asset base over the five-year span.

Equity Turnover

The equity turnover ratio demonstrates a significant upward trend, rising from 1.46 in 2019 to a sharp increase in 2021 and 2022, where it reaches over 5 times turnover before slightly decreasing to 4.93 in 2023. This substantial increase suggests enhanced efficiency in utilizing shareholder equity to generate revenue, although the slight dip in the final year may point to early signs of stabilizing or declining efficiency.

The financial data reveals a steady increase in revenues over the five-year period. Revenues rose consistently from $45,764 million in 2019 to $54,607 million in 2023, demonstrating a positive growth trend, although the growth rate appears to have moderated slightly in the last year.

Regarding property, plant, and equipment (PP&E), net of accumulated depreciation, the figures remained relatively stable from 2019 through 2021, varying narrowly between $34,310 million and $34,591 million. However, significant increases occurred in 2022 and 2023, with net PP&E rising to $36,039 million and then sharply to $39,520 million. This suggests substantial investment in fixed assets in the latter years.

The net fixed asset turnover ratio, which measures efficiency in using fixed assets to generate revenues, exhibited an improvement from 1.32 in 2019 to a peak of 1.51 in 2021, indicating more effective utilization of assets. This efficiency level held steady into 2022 at 1.50 but then declined to 1.38 in 2023. The decline in 2023 coincides with the notable increase in fixed assets, suggesting that the recent asset investments have not yet fully translated into proportionate revenue growth.

Revenue Trends

Consistent growth over five years, with a slight deceleration in the most recent year.

Property, Plant, and Equipment

Stable in the first three years, followed by significant increases in the last two years, indicative of capital expansion.

Net Fixed Asset Turnover

Efficiency improved initially, peaked in 2021, then decreased in 2023, implying a lag in asset utilization effectiveness relative to the increased asset base.

The financial data over the five-year period reveals several notable trends in key operational and asset management metrics.

Revenue Growth

Revenues exhibited a generally upward trajectory from 2019 through 2023. Starting at approximately $45.8 billion in 2019, revenues increased steadily each year, reaching about $54.6 billion by 2023. The growth was consistent but showed signs of slowing in the final year, with the smallest increase recorded between 2022 and 2023.

Property, Plant and Equipment (Net)

The net value of property, plant, and equipment, including operating lease right-of-use assets, remained relatively stable between 2019 and 2021, fluctuating narrowly around the $35.6 billion mark. From 2021 onward, this value began to rise more noticeably, reaching approximately $40.8 billion by the end of 2023, indicating increased investment or capital expenditure in tangible assets during the last two years.

Net Fixed Asset Turnover Ratio

This ratio, which measures revenue generated per dollar of net fixed assets, improved from 1.28 in 2019 to a peak of 1.45 in both 2021 and 2022, suggesting enhanced efficiency in asset utilization during this period. However, in 2023, there was a decline to 1.34, possibly reflecting the slower revenue growth relative to the increase in asset base.

Overall, the company demonstrated steady revenue growth supported by increased asset investment. The improvement in asset turnover up to 2022 indicates effective use of fixed assets to generate revenue, though the decline in 2023 suggests a need to monitor the efficiency of new asset investments moving forward.

Revenues

The revenues demonstrated a consistent upward trend over the five-year period. Starting at 45,764 million US dollars in 2019, revenues increased each year, reaching 54,607 million US dollars by the end of 2023. This represents an approximate total growth of 19.4% over the period, indicating steady expansion in the company's sales or service income.

Total Assets

Total assets showed a slight downward trend from 148,188 million US dollars in 2019 to 142,491 million US dollars in 2021, then experienced a gradual recovery to 147,193 million US dollars by 2023. This suggests moderate fluctuation in asset base size, with an initial contraction followed by a return near the original level over the five years.

Total Asset Turnover

The total asset turnover ratio increased from 0.31 in 2019 to 0.37 in 2023. This upward trend indicates improved efficiency in utilizing assets to generate revenue. The rise from 0.31 to 0.37 suggests enhanced operational effectiveness, with the company generating more revenue per unit of asset over time.

Revenues

The revenue figures demonstrate a steady upward trend over the five-year period. Starting at $45.8 billion in 2019, revenues increased consistently each year, reaching $54.6 billion by the end of 2023. This represents a cumulative growth of approximately 19.4%, indicating a positive expansion in the company’s business operations and market reach.

Total Charter Shareholders’ Equity

There is a notable downward trajectory in total shareholders' equity over the specified years. The equity declined sharply from $31.4 billion in 2019 to $11.1 billion in 2023, with marked decreases observed particularly between 2019 and 2022. Although there was a slight rebound between 2022 and 2023, the overall trend suggests significant erosion of equity, which could be attributed to factors such as share buybacks, dividend payments exceeding net income, or losses recognized during the period.

Equity Turnover Ratio

The equity turnover ratio reveals a pronounced increase from 1.46 in 2019 to a peak of 5.92 in 2022, followed by a slight decrease to 4.93 in 2023. This ratio measures how efficiently the company uses its equity to generate revenue. The upward trend indicates improved efficiency in generating revenues relative to its equity base, which aligns with the declining trend in equity and rising revenues. The slight decline in 2023 suggests a modest reduction in this efficiency metric, potentially reflecting stabilization after the period of rapid change.

Summary

Overall, the data reflects a scenario where the company consistently increased its revenues while experiencing a significant reduction in shareholders’ equity. This resulted in heightened equity turnover ratios, signaling increased revenue generation per unit of equity. The decline in equity may warrant further investigation into capital management strategies, while the growing revenues affirm continued operational growth. The slight moderation in the equity turnover ratio in the final year could indicate an adjustment phase following several years of rapid change.