Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Applied Materials Inc. (NASDAQ:AMAT)

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Analysis of Property, Plant and Equipment

Advanced level


Accounting Policy on Property, Plant and Equipment

Property, plant and equipment is stated at cost. Depreciation is provided over the estimated useful lives of the assets using the straight-line method. Estimated useful lives for financial reporting purposes are as follows: buildings and improvements, 3 to 30 years; demonstration and manufacturing equipment, 3 to 5 years; software, 3 to 5 years; and furniture, fixtures and other equipment, 3 to 5 years. Land improvements are amortized over the shorter of 15 years or the estimated useful life. Leasehold improvements are amortized over the shorter of five years or the lease term.

Source: 10-K (filing date: 2019-12-13).


Property, Plant and Equipment Disclosure

Applied Materials Inc., balance sheet: property, plant and equipment

US$ in millions

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Oct 27, 2019 Oct 28, 2018 Oct 29, 2017 Oct 30, 2016 Oct 25, 2015 Oct 26, 2014
Land and improvements
Buildings and improvements
Demonstration and manufacturing equipment
Furniture, fixtures and other equipment
Construction in progress
Gross property, plant and equipment
Accumulated depreciation
Property, plant and equipment, net

Based on: 10-K (filing date: 2019-12-13), 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17).

Item Description The company
Gross property, plant and equipment Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Applied Materials Inc.’s gross property, plant and equipment increased from 2017 to 2018 and from 2018 to 2019.
Property, plant and equipment, net Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Applied Materials Inc.’s property, plant and equipment, net increased from 2017 to 2018 and from 2018 to 2019.

Asset Age Ratios (Summary)

Applied Materials Inc., asset age ratios

Microsoft Excel LibreOffice Calc
Oct 27, 2019 Oct 28, 2018 Oct 29, 2017 Oct 30, 2016 Oct 25, 2015 Oct 26, 2014
Average age ratio
Estimated total useful life (years)
Estimated age, time elapsed since purchase (years)
Estimated remaining life (years)

Based on: 10-K (filing date: 2019-12-13), 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17).

Asset age ratio Description The company
Average age ratio As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Applied Materials Inc.’s average age ratio of depreciable property, plant and equipment improved from 2017 to 2018 and from 2018 to 2019.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Applied Materials Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2017 to 2018 and from 2018 to 2019.
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Applied Materials Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2017 to 2018 and from 2018 to 2019.
Estimated remaining life Applied Materials Inc.’s estimated remaining life of depreciable property, plant and equipment increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

Average Age

Microsoft Excel LibreOffice Calc
Oct 27, 2019 Oct 28, 2018 Oct 29, 2017 Oct 30, 2016 Oct 25, 2015 Oct 26, 2014
Selected Financial Data (US$ in millions)
Accumulated depreciation
Gross property, plant and equipment
Land and improvements
Asset Age Ratio
Average age1

Based on: 10-K (filing date: 2019-12-13), 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17).

2019 Calculations

1 Average age = 100 × Accumulated depreciation ÷ (Gross property, plant and equipment – Land and improvements)
= 100 × ÷ () =

Asset age ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Applied Materials Inc.’s average age ratio of depreciable property, plant and equipment improved from 2017 to 2018 and from 2018 to 2019.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
Oct 27, 2019 Oct 28, 2018 Oct 29, 2017 Oct 30, 2016 Oct 25, 2015 Oct 26, 2014
Selected Financial Data (US$ in millions)
Gross property, plant and equipment
Land and improvements
Depreciation expense
Asset Age Ratio (Years)
Estimated total useful life1

Based on: 10-K (filing date: 2019-12-13), 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17).

2019 Calculations

1 Estimated total useful life = (Gross property, plant and equipment – Land and improvements) ÷ Depreciation expense
= () ÷ =

Asset age ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Applied Materials Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2017 to 2018 and from 2018 to 2019.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel LibreOffice Calc
Oct 27, 2019 Oct 28, 2018 Oct 29, 2017 Oct 30, 2016 Oct 25, 2015 Oct 26, 2014
Selected Financial Data (US$ in millions)
Accumulated depreciation
Depreciation expense
Asset Age Ratio (Years)
Time elapsed since purchase1

Based on: 10-K (filing date: 2019-12-13), 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17).

2019 Calculations

1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= ÷ =

Asset age ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Applied Materials Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2017 to 2018 and from 2018 to 2019.

Estimated Remaining Life

Microsoft Excel LibreOffice Calc
Oct 27, 2019 Oct 28, 2018 Oct 29, 2017 Oct 30, 2016 Oct 25, 2015 Oct 26, 2014
Selected Financial Data (US$ in millions)
Property, plant and equipment, net
Land and improvements
Depreciation expense
Asset Age Ratio (Years)
Estimated remaining life1

Based on: 10-K (filing date: 2019-12-13), 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17).

2019 Calculations

1 Estimated remaining life = (Property, plant and equipment, net – Land and improvements) ÷ Depreciation expense
= () ÷ =

Asset age ratio Description The company
Estimated remaining life Applied Materials Inc.’s estimated remaining life of depreciable property, plant and equipment increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.