Applied Materials Inc. (NASDAQ:AMAT)

The analysis of the available financial turnover ratios over the quarterly periods reveals distinct trends in the company’s operational efficiency.

Net Fixed Asset Turnover

This ratio shows an overall declining trend from a high of approximately 12.25 in early 2022 to 7.33 by the first quarter of 2025. Starting from around 9.55 in early 2019, it rose steadily until early 2022, indicating increased efficiency in generating sales from fixed assets during that period. However, from early 2022 onward, there is a consistent decrease, reflecting potentially underutilized fixed assets or increased asset base without proportional sales growth.

Total Asset Turnover

The total asset turnover ratio fluctuates mildly but shows a general decline after peaking at around 0.98 in early 2022. It started lower in 2019, with values around 0.76-0.77, increased to close to 0.98 by early 2022, suggesting improved asset efficiency, but subsequently decreased to values near 0.79-0.84 by early 2025. This suggests a slowdown in the efficient use of total assets to generate revenue over the last few quarters.

Equity Turnover

Equity turnover exhibited an increase from about 1.63 in early 2020 to a peak of roughly 2.14 in early 2022, indicating more effective use of shareholder equity to drive sales during that timeframe. Since then, the ratio shows a declining pattern, falling to approximately 1.48 by early 2025. This decline may reflect decreased sales relative to equity, or increased equity base without corresponding sales growth.

In summary, all three turnover ratios demonstrate improvement leading up to early 2022, followed by consistent declines through to early 2025. This pattern suggests that while there was a period of enhanced operational efficiency and asset utilization, recent periods have seen a reduction in the company's effectiveness in leveraging its fixed assets, total assets, and equity to generate revenue. This trend warrants further investigation into underlying factors such as changes in sales, asset base expansions, or strategic shifts impacting asset and equity usage.

The financial data exhibits several notable trends in key performance areas over the multiple quarterly periods observed.

Net Revenue

Net revenue generally shows an upward trajectory from the beginning to later periods, starting at $3,753 million and peaking around $7,166 million before a slight decline to $7,100 million in the final quarter. There are fluctuations within this growth pattern, with occasional decreases, such as a dip around early 2023, but the overall trend indicates consistent revenue expansion over the years.

Property, Plant and Equipment, Net

The net value of property, plant, and equipment reveals a steady increase across the quarters, beginning at $1,456 million and reaching $3,832 million in the latest reported period. This reflects ongoing investment and asset growth, likely supporting capacity expansion or technological upgrades.

Net Fixed Asset Turnover

The net fixed asset turnover ratio shows a declining trend over time. Starting with values above 9.5 in earlier periods, it rises to a peak near 12.25, indicative of increasing efficiency in generating revenue from fixed assets. However, after this peak, there is a consistent decrease each quarter, falling to approximately 7.33 in the most recent period. This downward trend suggests that despite the growth in fixed assets and revenue, the efficiency with which those assets generate revenue has diminished in recent quarters.

In summary, the company demonstrates sustained revenue growth alongside significant investment in fixed assets. However, the declining net fixed asset turnover ratio post-peak raises considerations about the efficiency of asset utilization in generating revenues over the latter periods.

The analysis of the quarterly financial data reveals distinct trends in net revenue, total assets, and total asset turnover over the evaluated periods.

Net Revenue

The net revenue demonstrates a generally upward trend throughout the periods from early 2019 to the first quarter of 2025. Starting at approximately 3,753 million USD in January 2019, there is a noticeable dip in the second quarter of 2019, followed by a recovery and steady increases through subsequent quarters. Significant growth is observed around 2021, with net revenue surpassing 6,000 million USD and continuing to rise gradually towards 7,166 million USD by the April 2025 quarter. Minor fluctuations are present but the overall trajectory indicates consistent revenue growth over the long term.

Total Assets

Total assets show a persistent growth pattern with slight variability. Beginning near 18,922 million USD in January 2019, assets increase steadily, reaching a peak around 34,409 million USD by the January 2025 quarter. There is some fluctuation within this range; for example, a minor decrease is noted after April 2025, but the asset base remains substantially higher compared to the start of the period. This growth in assets corresponds with the revenue expansion, suggesting ongoing investment or acquisition activities increasing the asset base.

Total Asset Turnover

Total asset turnover ratio, which measures efficiency in using assets to generate revenue, shows a declining trend in recent quarters after initially improving. The ratio starts at approximately 0.77 in mid-2019, increases steadily to a peak of 0.98 in early 2022, indicating improved asset utilization. However, from this peak, the ratio gradually declines to around 0.80 by the first quarter of 2025. This suggests that while assets have grown significantly, their efficiency in generating revenue has decreased somewhat in the more recent periods.

In summary, the company has experienced strong revenue growth and expansion in total assets over the analyzed timeframe. However, the diminishing asset turnover ratio in later quarters may indicate a need for improved asset management or increased operational efficiency to sustain the growth trajectory and maximize returns on investment in assets.

The financial data indicates that net revenue has generally exhibited an upward trend over the examined periods. Starting from approximately 3,753 million USD in early 2019, net revenue experienced fluctuations but maintained a growth trajectory, reaching a peak around 7,166 million USD by the first quarter of 2024 before a slight decrease to about 7,100 million USD in the subsequent quarter. This reflects a nearly doubling of revenue over the six-year span, although short-term variability is observed.

Stockholders’ equity also demonstrates a positive trend overall, increasing from around 8,209 million USD in early 2019 to levels exceeding 18,961 million USD by the second quarter of 2024. The growth in equity was relatively steady, with occasional periods of plateau and minor declines, such as in early 2022 and mid-2025. The doubling of equity over this time frame suggests effective capitalization and retained earnings accumulation, contributing to strengthening the company’s financial foundation.

The equity turnover ratio reveals a different pattern. It shows values starting from about 1.78 in mid-2019, exhibiting a gradual decline over ensuing years. After peaking around 2.14 in early 2022, the ratio consistently decreased, reaching approximately 1.43 by late 2024, with a minor increase to 1.48 afterward. This downward trend indicates that the company’s efficiency in generating revenues from shareholders’ equity has diminished over time despite the overall growth in revenue and equity itself. This may suggest increasing equity relative to the rate of revenue growth or changes in business mix or operations impacting asset utilization.

In summary, the data reflects significant growth in both revenue and stockholders’ equity between 2019 and 2025. However, the declining equity turnover ratio points to a reduction in the relative efficiency of using equity to produce revenue. This combination indicates expansion accompanied by changing operational dynamics requiring continued review to ensure capital is utilized effectively.

Net Revenue

Steady growth from 2019 through 2024, nearly doubling, with short-term fluctuations and a slight dip near the end of the period.

Stockholders’ Equity

Consistent increase over the period, showcasing a doubling in value; some periods of stability or small decreases but generally positive.

Equity Turnover Ratio

Declining trend after a peak in early 2022, reflecting decreasing revenue generated per unit of equity over time.