Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Long-term Activity Ratios (Summary)
Meta Platforms Inc., long-term (investment) activity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
An examination of long-term activity ratios reveals consistent declines in asset utilization efficiency between 2021 and 2025. The ratios analyzed – net fixed asset turnover, total asset turnover, and equity turnover – all demonstrate downward trends, albeit at varying rates. This suggests a decreasing ability to generate revenue from the company’s asset base and equity investment over the observed period.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio decreased from 2.04 in 2021 to 1.14 in 2025. This indicates a substantial reduction in revenue generated per dollar of net fixed assets. The inclusion of operating lease right-of-use assets shows a similar, though less pronounced, decline, moving from 1.69 to 1.02 over the same timeframe. The convergence of these two ratios suggests that the increasing reliance on operating leases is not offsetting the overall decline in fixed asset utilization.
- Total Asset Turnover
- The total asset turnover ratio experienced a decrease from 0.71 in 2021 to 0.55 in 2025. This signifies a diminishing capacity to generate sales from the company’s entire asset base. While the ratio experienced a slight increase in 2024, it did not reverse the overall downward trend.
- Equity Turnover
- The equity turnover ratio exhibited a relatively stable, but slightly decreasing, trend, moving from 0.94 in 2021 to 0.93 in 2025. This indicates a minimal change in the amount of revenue generated per dollar of equity. The ratio remained relatively consistent throughout the period, with a slight dip in 2023 before a partial recovery in 2024 and 2025.
Collectively, these ratios suggest a growing inefficiency in asset utilization. The more significant declines in fixed asset and total asset turnover ratios, compared to the relatively stable equity turnover, imply that the company is becoming less effective at converting its investments in property, plant, and equipment, and overall assets, into revenue. Further investigation is warranted to understand the underlying causes of these trends, such as potential overinvestment in assets, declining sales, or changes in industry dynamics.
Net Fixed Asset Turnover
Meta Platforms Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | ||||||
| Property and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Media & Entertainment | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Net fixed asset turnover = Revenue ÷ Property and equipment, net
= ÷ =
2 Click competitor name to see calculations.
The net fixed asset turnover ratio demonstrates a consistent decline over the five-year period. Revenue increased substantially from 2021 to 2025, while property and equipment, net, also increased, but at a rate insufficient to maintain the initial turnover efficiency. This suggests a growing reliance on existing assets to generate revenue, or potentially, an over-investment in fixed assets relative to revenue generation.
- Net Fixed Asset Turnover Trend
- The ratio decreased from 2.04 in 2021 to 1.14 in 2025. This represents a 44.1% reduction in the efficiency with which fixed assets are used to generate sales. The most significant decline occurred between 2021 and 2022, dropping to 1.47, followed by a more gradual decrease in subsequent years.
Revenue experienced growth throughout the period, increasing from US$117,929 million in 2021 to US$200,966 million in 2025. However, the growth in property and equipment, net, was substantial, rising from US$57,809 million in 2021 to US$176,400 million in 2025. The larger proportional increase in fixed assets compared to revenue is the primary driver of the declining net fixed asset turnover ratio.
- Revenue Growth vs. Fixed Asset Growth
- Revenue increased by 70.4% over the period. Property and equipment, net, increased by 204.7% over the same period. This disparity indicates that investments in fixed assets are outpacing revenue growth, leading to reduced efficiency in asset utilization.
The decreasing ratio could indicate several factors. It may reflect strategic investments in long-term projects that have not yet fully translated into revenue, or it could suggest diminishing returns on fixed asset investments. Further investigation into the nature of these fixed asset investments and their associated revenue streams would be necessary to determine the underlying cause of this trend.
- Potential Implications
- A consistently declining net fixed asset turnover ratio may signal inefficiencies in asset management. While increased investment can be positive, the observed trend suggests a need to evaluate the effectiveness of capital expenditure decisions and ensure that investments are generating adequate returns.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Meta Platforms Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | ||||||
| Property and equipment, net | ||||||
| Operating lease right-of-use assets | ||||||
| Property and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Media & Entertainment | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenue ÷ Property and equipment, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
The net fixed asset turnover ratio, alongside its component figures of revenue and net fixed assets (including operating leases and right-of-use assets), demonstrates a shifting pattern over the five-year period. Revenue experienced fluctuations, while net fixed assets consistently increased. Consequently, the net fixed asset turnover ratio exhibited a clear downward trend.
- Revenue
- Revenue decreased from US$117,929 million in 2021 to US$116,609 million in 2022, representing a slight contraction. However, subsequent years showed substantial growth, reaching US$134,902 million in 2023, US$164,501 million in 2024, and culminating in US$200,966 million in 2025. This indicates a recovery and accelerating revenue expansion in the later part of the period.
- Property and Equipment, Net (including operating lease, right-of-use asset)
- Net fixed assets increased steadily throughout the observed period. Beginning at US$69,964 million in 2021, they rose to US$92,191 million in 2022, US$109,881 million in 2023, US$136,268 million in 2024, and ultimately reached US$196,804 million in 2025. This consistent growth suggests ongoing investment in fixed assets.
- Net Fixed Asset Turnover (including operating lease, right-of-use asset)
- The net fixed asset turnover ratio declined from 1.69 in 2021 to 1.26 in 2022. This downward trend continued, albeit at a slower pace, with ratios of 1.23 in 2023 and 1.21 in 2024. The ratio further decreased to 1.02 in 2025. This indicates that the company is generating less revenue for each dollar invested in fixed assets over time. While revenue is increasing, the growth in fixed assets is outpacing it, leading to diminishing efficiency in asset utilization. The substantial increase in fixed assets relative to revenue suggests potential over-investment in fixed assets or a lag in fully utilizing the capacity of those assets.
The combination of increasing fixed assets and fluctuating, but ultimately growing, revenue resulted in a consistent decline in the net fixed asset turnover ratio. This trend warrants further investigation to determine the underlying causes and potential implications for future profitability and investment strategies.
Total Asset Turnover
Meta Platforms Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| Total Asset Turnover, Sector | ||||||
| Media & Entertainment | ||||||
| Total Asset Turnover, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Total asset turnover = Revenue ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The total asset turnover ratio demonstrates a declining trend over the five-year period. Initially, the ratio stood at 0.71 in 2021, and subsequently decreased to 0.55 by 2025. This indicates a diminishing efficiency in utilizing assets to generate revenue.
- Overall Trend
- A consistent downward trajectory is evident in the total asset turnover ratio. The ratio decreased from 0.71 in 2021 to 0.63 in 2022, continued to 0.59 in 2023, experienced a slight increase to 0.60 in 2024, and then further declined to 0.55 in 2025. This suggests a progressively less effective use of assets to drive sales.
- Year-over-Year Changes
- The largest year-over-year decrease occurred between 2021 and 2022, with a reduction of 0.08. The decrease from 2022 to 2023 was smaller, at 0.04. While 2024 showed a marginal improvement of 0.01, this was short-lived as the ratio decreased again in 2025. These fluctuations suggest that changes in revenue and asset levels are not consistently aligned to maintain or improve asset utilization.
- Relationship to Revenue and Assets
- Revenue increased substantially over the period, rising from US$117,929 million in 2021 to US$200,966 million in 2025. However, total assets grew at a faster rate, increasing from US$165,987 million to US$366,021 million over the same timeframe. This disparity in growth rates is the primary driver of the declining total asset turnover ratio, indicating that the company is investing in assets at a rate exceeding revenue generation.
The observed trend warrants further investigation to determine the underlying causes. Potential factors could include increased investment in long-term assets, inefficient asset management practices, or a shift in business strategy that prioritizes long-term growth over immediate asset utilization.
Equity Turnover
Meta Platforms Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | ||||||
| Stockholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| Equity Turnover, Sector | ||||||
| Media & Entertainment | ||||||
| Equity Turnover, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Equity turnover = Revenue ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The equity turnover ratio exhibits a generally stable pattern over the five-year period, with minor fluctuations. Revenue demonstrates a consistent upward trajectory, while stockholders’ equity also increases throughout the period. However, the equity turnover ratio does not consistently rise with these increases, indicating a complex relationship between revenue generation and equity utilization.
- Equity Turnover Ratio
- The equity turnover ratio decreased slightly from 0.94 in 2021 to 0.93 in 2022. A further decrease to 0.88 was observed in 2023, representing the lowest value within the observed timeframe. The ratio experienced a modest recovery to 0.90 in 2024, followed by an increase to 0.93 in 2025, returning to the level observed in 2022.
- Revenue Trend
- Revenue increased from US$117,929 million in 2021 to US$134,902 million in 2023, representing substantial growth. This growth continued, with revenue reaching US$164,501 million in 2024 and further increasing to US$200,966 million in 2025. The consistent revenue growth suggests effective sales and marketing strategies or increased market demand.
- Stockholders’ Equity Trend
- Stockholders’ equity increased steadily throughout the period, moving from US$124,879 million in 2021 to US$153,168 million in 2023. This upward trend continued, reaching US$182,637 million in 2024 and US$217,243 million in 2025. The consistent growth in equity suggests successful retention of earnings and potentially new equity issuances.
- Relationship between Revenue, Equity, and Turnover
- Despite consistent increases in both revenue and stockholders’ equity, the equity turnover ratio did not exhibit a corresponding consistent increase. The dip in the ratio in 2023, despite revenue growth, suggests that the company’s equity base grew at a faster rate than its revenue generation during that year. The subsequent stabilization and slight increase in the ratio in 2024 and 2025 indicate a more balanced relationship between equity and revenue, but the ratio remains relatively stable overall.