Western Digital Corp. (NASDAQ:WDC)

Net fixed asset turnover

The net fixed asset turnover ratio showed a general declining trend over the observed periods. It started at 6.67 in June 2018 and decreased steadily, reaching 3.4 by June 2023. This decline indicates a reduction in efficiency in utilizing fixed assets to generate sales. The most significant drop occurred between July 2022 and June 2023.

Net fixed asset turnover including operating lease, right-of-use asset

When considering operating leases and right-of-use assets, the net fixed asset turnover also declined, starting from 6.67 in June 2018 to 3.17 in June 2023. This ratio consistently tracked below the net fixed asset turnover without leases, with a widening gap over time, suggesting that the inclusion of leased assets further lowers the turnover ratio, reflecting increasing leased asset allocation or decreased efficiency.

Total asset turnover

The total asset turnover ratio experienced slight fluctuations across the periods. Beginning at 0.71 in June 2018, it dropped to 0.63 in June 2019 but gradually recovered to 0.72 by July 2022 before declining sharply to 0.5 in June 2023. This pattern indicates variability in overall asset utilization efficiency, with a notable decrease in the most recent year, which may suggest challenges in generating revenue from total assets.

Equity turnover

Equity turnover also showed a downward trend over the years. Starting from 1.79 in June 2018, it generally decreased to 1.05 by June 2023. The decline reflects a reduced rate at which shareholders' equity is being turned over into sales, pointing to possible changes in equity management or profitability relative to equity base.

Revenue, net

The net revenue exhibits a declining trend from 2018 through 2019, dropping from 20,647 million US dollars to 16,569 million. The revenue stabilizes somewhat during 2020 and 2021, maintaining around 16,700 to 16,900 million. A notable increase occurs in 2022, reaching 18,793 million, followed by a significant decrease in 2023 to 12,318 million. This fluctuation suggests variability in sales performance or market conditions over the observed periods.

Property, plant and equipment, net

The net value of property, plant, and equipment shows a general upward trend over the years, beginning at 3,095 million US dollars in 2018 and rising to 3,670 million by 2022. There is a slight decrease to 3,620 million in 2023. This overall increase indicates ongoing investment in fixed assets, possibly reflecting efforts to support production capacity or technological upgrades, despite a minor reduction in the final year.

Net fixed asset turnover

The net fixed asset turnover ratio, which measures how efficiently fixed assets generate revenue, decreases consistently across the period. Starting at a high of 6.67 in 2018, it declines progressively to 3.4 in 2023. This declining ratio suggests diminishing efficiency in utilizing fixed assets to produce revenue, paralleling a decline in revenue particularly pronounced in the latest year. This may point to underutilization of assets or challenges in leveraging recent fixed asset investments into proportional revenue gains.

Revenue, net

The net revenue exhibited a declining trend from 2018 to 2019, decreasing from 20,647 million USD to 16,569 million USD. It remained relatively stable through 2020 and 2021 with slight increases, reaching 16,736 million USD and 16,922 million USD respectively. In 2022, there was a notable rebound with revenue rising to 18,793 million USD. However, in 2023, a significant drop occurred, bringing revenue down sharply to 12,318 million USD.

Property, plant and equipment, net (including operating lease, right-of-use asset)

The net value of property, plant, and equipment displayed an overall increasing trend from 2018 to 2023. Starting at 3,095 million USD in 2018, it slightly declined in 2019 to 2,843 million USD. From 2020 onwards, the value steadily increased each year, peaking at 3,970 million USD in 2022 before a marginal decrease to 3,880 million USD in 2023.

Net fixed asset turnover (including operating lease, right-of-use asset)

The net fixed asset turnover ratio consistently declined over the observed period, dropping from 6.67 in 2018 to 3.17 in 2023. This suggests that the efficiency with which the company utilized its fixed assets to generate revenue diminished steadily, with a particularly sharp decline noted in the last year.

The financial data over the six-year period indicates several notable trends in revenue, total assets, and efficiency as measured by total asset turnover.

Revenue, net

This metric shows fluctuations with an overall declining trend towards the end of the period. Starting at 20,647 million USD in 2018, revenue decreased sharply by 2019 to 16,569 million USD, followed by a slight increase in 2020 and 2021. Revenue peaked again in 2022 at 18,793 million USD but then experienced a significant decline to 12,318 million USD by mid-2023, suggesting challenges in maintaining revenue growth or market conditions impacting sales.

Total assets

Total assets have generally decreased over the period from 29,235 million USD in 2018 to 24,429 million USD in 2023. The decline appears steady with minor fluctuations, indicating a reduction in asset base or possible asset disposals, impairments, or operational changes affecting asset size.

Total asset turnover

Total asset turnover ratio, which measures efficiency in using assets to generate revenue, started at 0.71 in 2018 and trended downward, reaching a low of 0.50 in 2023. This decrease suggests declining efficiency in asset utilization. Although a slight recovery occurred in 2022 (0.72), the sharp drop in the following year implies a diminished ability to generate revenue from assets, which coincides with the significant fall in net revenue.

In summary, the data indicates a contraction in both revenue and total assets, along with declining asset utilization efficiency over recent years. The sharp decline in revenue and asset turnover in 2023 stands out as a significant concern that may require further investigation into operational performance, market conditions, or strategic initiatives during this period.

Revenue, net

The net revenue demonstrated a declining trend from 2018 to 2019, decreasing significantly from 20,647 million USD to 16,569 million USD. Following this decline, the revenue stabilized around 16,700 million USD in 2020 and saw a slight increase to 16,922 million USD in 2021. A more pronounced growth occurred in 2022, with revenue increasing to 18,793 million USD. However, the most recent period ending in 2023 shows a marked decrease to 12,318 million USD, indicating a substantial reduction in revenue compared to the previous years.

Shareholders’ equity

Shareholders’ equity experienced a consistent downward movement from 11,531 million USD in 2018 to 9,551 million USD in 2020. From 2020 onwards, the equity gradually increased, reaching 12,221 million USD in 2022, before slightly retracting to 11,723 million USD in 2023. Overall, the equity shows some recovery after the initial decline but did not return to the peak seen in 2018.

Equity turnover

The equity turnover ratio, which measures how efficiently equity is used to generate revenue, decreased steadily over the observed periods. Starting at 1.79 in 2018, it declined to 1.66 in 2019, then increased slightly to 1.75 in 2020 before continuing its downward trend to 1.05 in 2023. This decline reflects reduced efficiency in using equity to produce revenue, particularly notable in the last year where the ratio dropped significantly.