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.
Long-term Activity Ratios (Summary)
American Airlines Group Inc., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The asset activity ratios exhibit a distinct V-shaped trajectory between 2019 and 2023, characterized by a severe contraction in 2020 followed by a sustained period of recovery and expansion. By the end of the observed period, revenue generation efficiency relative to the asset base surpassed pre-2020 levels across all measured metrics.
- Net Fixed Asset Turnover
- A significant decline is observed in 2020, where the ratio dropped from 1.31 to 0.55. However, a consistent upward trend followed, with the ratio climbing to 1.01 in 2021, 1.62 in 2022, and peaking at 1.72 in 2023. This indicates a substantial improvement in the efficiency of utilizing fixed assets to generate revenue, ending the period significantly higher than the 2019 baseline.
- Net Fixed Asset Turnover Including Operating Leases
- When incorporating right-of-use assets, a similar pattern emerges. The ratio fell from 1.05 in 2019 to a low of 0.44 in 2020. The subsequent recovery saw the ratio rise to 0.80 in 2021, 1.28 in 2022, and 1.36 in 2023. The consistently lower values compared to the standard net fixed asset turnover reflect the impact of the substantial right-of-use asset base on the overall turnover calculation.
- Total Asset Turnover
- The total asset turnover ratio experienced a sharp contraction in 2020, falling from 0.76 to 0.28. Recovery progressed steadily through 2021 (0.45) and 2022 (0.76), eventually reaching 0.84 by December 31, 2023. The return to and subsequent exceedance of the 2019 level suggests an overall optimization of the entire asset portfolio in relation to revenue production.
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Net Fixed Asset Turnover
American Airlines Group Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating revenues | 52,788) | 48,971) | 29,882) | 17,337) | 45,768) | |
| Property and equipment, net | 30,764) | 30,200) | 29,537) | 31,699) | 34,995) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 1.72 | 1.62 | 1.01 | 0.55 | 1.31 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| FedEx Corp. | 2.22 | 2.45 | 2.35 | — | — | |
| Uber Technologies Inc. | 17.98 | 15.31 | 9.42 | — | — | |
| Union Pacific Corp. | 0.42 | 0.44 | 0.40 | — | — | |
| United Airlines Holdings Inc. | 1.35 | 1.31 | 0.77 | — | — | |
| United Parcel Service Inc. | 2.46 | 2.89 | 2.91 | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Transportation | 1.67 | 1.79 | 1.55 | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Industrials | 2.86 | 2.94 | 2.72 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net fixed asset turnover = Operating revenues ÷ Property and equipment, net
= 52,788 ÷ 30,764 = 1.72
2 Click competitor name to see calculations.
The analysis of asset utilization indicates a period of significant volatility followed by a sustained recovery in operational efficiency. Between 2019 and 2023, the relationship between operating revenues and net fixed assets shifted from a contraction phase to a period of optimized productivity.
- Operating Revenue and Fixed Asset Trends
- Operating revenues experienced a severe decline from 45,768 million USD in 2019 to 17,337 million USD in 2020. A consistent recovery followed, with revenues climbing to 52,788 million USD by 2023, surpassing pre-2020 levels. Concurrently, net property and equipment decreased from 34,995 million USD in 2019 to a low of 29,537 million USD in 2021, before stabilizing at 30,764 million USD in 2023.
- Net Fixed Asset Turnover Performance
- The net fixed asset turnover ratio reflects a sharp V-shaped trajectory. The ratio fell from 1.31 in 2019 to 0.55 in 2020, signaling a substantial drop in the ability of fixed assets to generate revenue. Following this trough, the ratio improved annually, reaching 1.01 in 2021, 1.62 in 2022, and peaking at 1.72 in 2023.
- Asset Efficiency Insights
- The progression of the turnover ratio indicates that the company has become more efficient in utilizing its investment in fixed assets. The increase to 1.72 by 2023 is attributable to the combination of expanding revenues and a leaner net asset base compared to 2019. This suggests that the current operational scale is generating higher revenue per dollar of net fixed assets than in the baseline year of 2019.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
American Airlines Group Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating revenues | 52,788) | 48,971) | 29,882) | 17,337) | 45,768) | |
| Property and equipment, net | 30,764) | 30,200) | 29,537) | 31,699) | 34,995) | |
| Operating lease right-of-use assets | 7,939) | 8,094) | 7,850) | 8,039) | 8,737) | |
| Property and equipment, net (including operating lease, right-of-use asset) | 38,703) | 38,294) | 37,387) | 39,738) | 43,732) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 1.36 | 1.28 | 0.80 | 0.44 | 1.05 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| FedEx Corp. | 1.55 | 1.71 | 1.64 | — | — | |
| Uber Technologies Inc. | 11.25 | 9.03 | 5.39 | — | — | |
| Union Pacific Corp. | 0.41 | 0.43 | 0.38 | — | — | |
| United Airlines Holdings Inc. | 1.23 | 1.17 | 0.67 | — | — | |
| United Parcel Service Inc. | 2.20 | 2.61 | 2.63 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Transportation | 1.44 | 1.53 | 1.33 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Industrials | 2.49 | 2.54 | 2.34 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Operating revenues ÷ Property and equipment, net (including operating lease, right-of-use asset)
= 52,788 ÷ 38,703 = 1.36
2 Click competitor name to see calculations.
The analysis of long-term activity ratios indicates a period of extreme volatility followed by a recovery that resulted in higher asset utilization efficiency by the end of 2023 compared to 2019 levels.
- Operating Revenue Trends
- A significant contraction in operating revenues occurred in 2020, with values falling from 45,768 million US$ in 2019 to 17,337 million US$. This was followed by a consistent three-year recovery phase, with revenues ascending to 29,882 million US$ in 2021, 48,971 million US$ in 2022, and peaking at 52,788 million US$ in 2023.
- Fixed Asset Base Management
- Net property and equipment, including right-of-use assets, exhibited a downward trend from 2019 to 2021, decreasing from 43,732 million US$ to 37,387 million US$. Since 2021, the asset base has stabilized and grown slightly, reaching 38,703 million US$ by December 31, 2023. Notably, the asset base remained approximately 11.4% lower in 2023 than it was in 2019.
- Net Fixed Asset Turnover Analysis
- The net fixed asset turnover ratio experienced a sharp decline from 1.05 in 2019 to 0.44 in 2020, reflecting the disconnect between fixed costs/assets and the sudden loss of revenue. A strong recovery trend is observed from 2021 onward, with the ratio climbing to 0.80 in 2021 and surpassing pre-pandemic levels in 2022 at 1.28. By 2023, the ratio reached 1.36, signifying that the entity is generating substantially more revenue per unit of net fixed asset than was achieved in 2019.
The overall trend demonstrates a successful realignment of the asset base relative to revenue generation. The increase in the turnover ratio from 1.05 to 1.36 suggests improved operational efficiency, as the organization expanded its revenue stream while maintaining a leaner fixed asset structure than that held at the start of the analyzed period.
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Total Asset Turnover
American Airlines Group Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating revenues | 52,788) | 48,971) | 29,882) | 17,337) | 45,768) | |
| Total assets | 63,058) | 64,716) | 66,467) | 62,008) | 59,995) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.84 | 0.76 | 0.45 | 0.28 | 0.76 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| FedEx Corp. | 1.03 | 1.09 | 1.01 | — | — | |
| Uber Technologies Inc. | 0.96 | 0.99 | 0.45 | — | — | |
| Union Pacific Corp. | 0.36 | 0.38 | 0.34 | — | — | |
| United Airlines Holdings Inc. | 0.76 | 0.67 | 0.36 | — | — | |
| United Parcel Service Inc. | 1.28 | 1.41 | 1.40 | — | — | |
| Total Asset Turnover, Sector | ||||||
| Transportation | 0.88 | 0.92 | 0.76 | — | — | |
| Total Asset Turnover, Industry | ||||||
| Industrials | 0.67 | 0.66 | 0.58 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Total asset turnover = Operating revenues ÷ Total assets
= 52,788 ÷ 63,058 = 0.84
2 Click competitor name to see calculations.
An analysis of the investment activity ratios reveals a period of significant volatility followed by a consistent recovery in asset utilization efficiency. The total asset turnover ratio experienced a sharp contraction in 2020, coinciding with a substantial collapse in operating revenues, before trending upward to reach a five-year peak by the end of 2023.
- Impact of Revenue Volatility on Asset Efficiency
- Operating revenues decreased drastically from US$ 45,768 million in 2019 to US$ 17,337 million in 2020. During this same period, total assets increased from US$ 59,995 million to US$ 62,008 million. This divergence caused the total asset turnover ratio to drop from 0.76 to 0.28, indicating a severe decline in the ability to generate revenue from the company's asset base.
- Recovery and Normalization (2021–2022)
- A sustained recovery in revenue generation is observed from 2021 through 2022, with operating revenues rising to US$ 29,882 million and US$ 48,971 million, respectively. Total assets peaked in 2021 at US$ 66,467 million before trending downward. As a result, the total asset turnover ratio climbed to 0.45 in 2021 and returned to its pre-pandemic level of 0.76 by December 31, 2022.
- Optimization of Asset Utilization (2023)
- By the end of 2023, operating revenues reached their highest point in the analyzed period at US$ 52,788 million, while total assets were further reduced to US$ 63,058 million. This simultaneous increase in revenue and decrease in the asset base resulted in a total asset turnover ratio of 0.84, representing the highest level of operational efficiency regarding asset use across the five-year span.
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Equity Turnover
American Airlines Group Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating revenues | 52,788) | 48,971) | 29,882) | 17,337) | 45,768) | |
| Stockholders’ deficit | (5,202) | (5,799) | (7,340) | (6,867) | (118) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | — | — | — | — | — | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| FedEx Corp. | 3.46 | 3.75 | 3.47 | — | — | |
| Uber Technologies Inc. | 3.31 | 4.34 | 1.21 | — | — | |
| Union Pacific Corp. | 1.63 | 2.05 | 1.54 | — | — | |
| United Airlines Holdings Inc. | 5.76 | 6.52 | 4.90 | — | — | |
| United Parcel Service Inc. | 5.26 | 5.07 | 6.83 | — | — | |
| Equity Turnover, Sector | ||||||
| Transportation | 3.76 | 4.16 | 3.40 | — | — | |
| Equity Turnover, Industry | ||||||
| Industrials | 3.33 | 3.06 | 2.63 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Equity turnover = Operating revenues ÷ Stockholders’ deficit
= 52,788 ÷ -5,202 = —
2 Click competitor name to see calculations.
The financial trajectory between 2019 and 2023 is characterized by a severe revenue contraction followed by a sustained recovery, occurring alongside a significant degradation and subsequent slow improvement of the equity position.
- Revenue Performance Trends
- Operating revenues declined sharply from US$ 45,768 million in 2019 to a low of US$ 17,337 million in 2020. From 2021 onward, a consistent upward trend is observed, with revenues surpassing 2019 levels in 2022 and reaching US$ 52,788 million by December 31, 2023.
- Equity Position and Deficit Analysis
- A transition from a marginal stockholders' deficit of US$ 118 million in 2019 to a substantial deficit of US$ 7,340 million by 2021 is evident. While the deficit began to narrow in 2022 and further decreased to US$ 5,202 million by 2023, the equity remains negative throughout the entire period analyzed.
- Interpretation of Equity Turnover
- The presence of a continuous stockholders' deficit renders the traditional equity turnover ratio mathematically negative. Consequently, the ratio cannot be used as a standard measure of asset efficiency. This condition indicates that the company's operations and revenue growth are financed entirely through liabilities rather than shareholder equity, reflecting a high degree of financial leverage and a negative net worth position.
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