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)
Axon Enterprise Inc., long-term (investment) activity ratios
Based on: 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), 10-K (reporting date: 2018-12-31).
The analysis of investment activity ratios from 2018 to 2022 reveals a period of significant adjustment in asset utilization efficiency, characterized by a notable shift in performance dynamics beginning in 2020.
- Net Fixed Asset Turnover
- A sharp decline in efficiency is observed between 2019 and 2020, with the ratio falling from 12.13 to 6.46. This suggests a substantial increase in net fixed assets relative to revenue growth during that period. Although a slight recovery occurred by 2022, reaching 7.01, the turnover remains considerably lower than the levels maintained in 2018 and 2019.
- Net Fixed Asset Turnover Including Right-of-Use Assets
- When incorporating operating leases and right-of-use assets, a consistent downward trend is evident from 2018 (11.09) through 2020 (5.33). The widening gap between this metric and the standard net fixed asset turnover indicates an increased impact of leased assets on the balance sheet. A marginal improvement was noted in 2022, with the ratio rising to 5.71.
- Total Asset Turnover
- Total asset utilization has experienced a general downward trajectory, peaking at 0.63 in 2019 before declining to 0.42 by 2022. This trend indicates that the company is generating progressively less revenue per unit of total assets, reflecting a potential lag between asset expansion and corresponding revenue realization.
- Equity Turnover
- Equity turnover exhibited volatility but demonstrated a strong recovery trend in the latter half of the period. After a decline to 0.70 in 2020, the ratio improved steadily to 0.94 in 2022, nearly returning to its 2019 peak of 0.98. This suggests that the company has effectively optimized its equity base to support revenue generation following the 2020 contraction.
In summary, a divergence is observed between equity efficiency and asset efficiency. While the ability to generate revenue from equity has largely recovered to previous levels, the overall efficiency of the asset base—specifically fixed and total assets—has not returned to the performance levels seen prior to 2020.
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Net Fixed Asset Turnover
Axon Enterprise Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | 1,189,935) | 863,381) | 681,003) | 530,860) | 420,068) | |
| Property and equipment, net | 169,843) | 138,457) | 105,494) | 43,770) | 37,893) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 7.01 | 6.24 | 6.46 | 12.13 | 11.09 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Boeing Co. | 6.31 | 5.70 | — | — | — | |
| Caterpillar Inc. | 4.70 | 3.99 | — | — | — | |
| Eaton Corp. plc | 6.59 | 6.41 | — | — | — | |
| GE Aerospace | 5.96 | 5.47 | — | — | — | |
| Honeywell International Inc. | 6.48 | 6.18 | — | — | — | |
| Lockheed Martin Corp. | 8.27 | 8.83 | — | — | — | |
| RTX Corp. | 4.42 | 4.30 | — | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Capital Goods | 5.79 | 5.46 | — | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Industrials | 2.94 | 2.72 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Net fixed asset turnover = Net sales ÷ Property and equipment, net
= 1,189,935 ÷ 169,843 = 7.01
2 Click competitor name to see calculations.
The financial data reveals a period of aggressive scaling characterized by consistent revenue growth and a significant expansion of the long-term asset base. While net sales experienced an uninterrupted upward trajectory from 2018 to 2022, the efficiency with which fixed assets generated those sales shifted markedly following a major capital investment phase.
- Net Sales Growth
- Net sales demonstrated strong and consistent growth, increasing from 420,068 thousand US$ in 2018 to 1,189,935 thousand US$ in 2022. This represents a nearly threefold increase over the five-year period, indicating a robust expansion of market reach or product demand.
- Property and Equipment Investment
- The net value of property and equipment grew from 37,893 thousand US$ in 2018 to 169,843 thousand US$ in 2022. A pivotal shift occurred between 2019 and 2020, where the asset base more than doubled from 43,770 thousand US$ to 105,494 thousand US$, signaling a substantial investment in infrastructure or production capacity.
- Net Fixed Asset Turnover Analysis
- The net fixed asset turnover ratio peaked in 2019 at 12.13, reflecting high capital efficiency. However, a sharp decline is observed in 2020, with the ratio dropping to 6.46. This contraction is attributed to the rapid increase in fixed assets outpacing the growth in sales during that specific period. The ratio remained relatively stable in 2021 at 6.24 before showing a moderate recovery to 7.01 in 2022, suggesting that the increased capacity began to yield higher proportional sales returns.
In summary, the transition from a very high turnover ratio (above 11.0) to a stabilized lower range (6.2 to 7.0) indicates a shift in the operational model from a lean asset base to a more capital-intensive structure. The slight recovery in the final year suggests an improving synchronization between expanded fixed asset capacity and revenue generation.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Axon Enterprise Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | 1,189,935) | 863,381) | 681,003) | 530,860) | 420,068) | |
| Property and equipment, net | 169,843) | 138,457) | 105,494) | 43,770) | 37,893) | |
| Operating lease assets | 38,370) | 23,270) | 22,308) | 9,653) | —) | |
| Property and equipment, net (including operating lease, right-of-use asset) | 208,213) | 161,727) | 127,802) | 53,423) | 37,893) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 5.71 | 5.34 | 5.33 | 9.94 | 11.09 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Boeing Co. | 5.55 | 5.04 | — | — | — | |
| Caterpillar Inc. | 4.49 | 3.79 | — | — | — | |
| Eaton Corp. plc | 5.58 | 5.60 | — | — | — | |
| GE Aerospace | 5.08 | 4.55 | — | — | — | |
| Honeywell International Inc. | 5.58 | 5.28 | — | — | — | |
| Lockheed Martin Corp. | 7.27 | 7.54 | — | — | — | |
| RTX Corp. | 3.95 | 3.80 | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Capital Goods | 5.13 | 4.80 | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Industrials | 2.54 | 2.34 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Net sales ÷ Property and equipment, net (including operating lease, right-of-use asset)
= 1,189,935 ÷ 208,213 = 5.71
2 Click competitor name to see calculations.
The financial performance between 2018 and 2022 is characterized by substantial growth in both revenue and the fixed asset base, though the efficiency of asset utilization experienced a significant transition during this period.
- Revenue and Asset Growth Trends
- Net sales demonstrated consistent and aggressive growth, increasing from 420,068 thousand US dollars in 2018 to 1,189,935 thousand US dollars by 2022. Simultaneously, net property and equipment, including right-of-use assets, expanded from 37,893 thousand US dollars to 208,213 thousand US dollars. The most pronounced increase in fixed assets occurred between 2019 and 2020, where the value more than doubled, indicating a period of heavy capital investment or significant lease acquisitions.
- Net Fixed Asset Turnover Analysis
- The net fixed asset turnover ratio underwent a sharp decline in the early part of the observed period, falling from 11.09 in 2018 to 5.33 in 2020. This downward trajectory indicates that the growth in the fixed asset base outpaced the growth in net sales, suggesting a period of capacity expansion where new investments had not yet reached full revenue-generating potential.
- Stabilization and Recovery Patterns
- Following the decline, the turnover ratio stabilized between 2020 and 2021 at approximately 5.33 to 5.34. A slight recovery was observed in 2022, with the ratio increasing to 5.71. This shift suggests that the company has begun to optimize its expanded asset base, improving the efficiency with which these investments are converted into sales.
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Total Asset Turnover
Axon Enterprise Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | 1,189,935) | 863,381) | 681,003) | 530,860) | 420,068) | |
| Total assets | 2,851,894) | 1,688,210) | 1,381,023) | 845,639) | 719,540) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.42 | 0.51 | 0.49 | 0.63 | 0.58 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Boeing Co. | 0.49 | 0.45 | — | — | — | |
| Caterpillar Inc. | 0.69 | 0.58 | — | — | — | |
| Eaton Corp. plc | 0.59 | 0.58 | — | — | — | |
| GE Aerospace | 0.39 | 0.36 | — | — | — | |
| Honeywell International Inc. | 0.57 | 0.53 | — | — | — | |
| Lockheed Martin Corp. | 1.25 | 1.32 | — | — | — | |
| RTX Corp. | 0.42 | 0.40 | — | — | — | |
| Total Asset Turnover, Sector | ||||||
| Capital Goods | 0.54 | 0.50 | — | — | — | |
| Total Asset Turnover, Industry | ||||||
| Industrials | 0.66 | 0.58 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Total asset turnover = Net sales ÷ Total assets
= 1,189,935 ÷ 2,851,894 = 0.42
2 Click competitor name to see calculations.
An analysis of long-term investment activity reveals a divergence between revenue growth and asset expansion over the five-year period ending December 31, 2022. While net sales demonstrated a consistent and strong upward trajectory, the rate of asset accumulation exceeded the rate of sales growth, resulting in a general decline in asset utilization efficiency.
- Revenue and Asset Growth Patterns
- Net sales increased substantially from $420.1 million in 2018 to $1.19 billion in 2022. During the same period, total assets grew more aggressively, rising from $719.5 million to $2.85 billion. This indicates that the expansion of the balance sheet has significantly outpaced the growth of the top line.
- Total Asset Turnover Trend
- The total asset turnover ratio peaked at 0.63 in 2019 before entering a period of volatility and general decline. After dropping to 0.49 in 2020 and seeing a marginal recovery to 0.51 in 2021, the ratio fell to a five-year low of 0.42 by the end of 2022.
- Analysis of Asset Efficiency
- The downward trend in the turnover ratio suggests a diminishing capacity to generate sales relative to the asset base. This is most evident between 2021 and 2022, where total assets increased by approximately 69%, while net sales grew by approximately 38%. The disparity between these two growth rates led to a sharp contraction in the efficiency ratio, indicating that new investments in assets have not yet translated into proportional revenue gains.
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Equity Turnover
Axon Enterprise Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | 1,189,935) | 863,381) | 681,003) | 530,860) | 420,068) | |
| Stockholders’ equity | 1,268,491) | 1,047,849) | 976,255) | 543,495) | 467,324) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 0.94 | 0.82 | 0.70 | 0.98 | 0.90 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 3.57 | 2.92 | — | — | — | |
| Eaton Corp. plc | 1.22 | 1.20 | — | — | — | |
| GE Aerospace | 2.02 | 1.76 | — | — | — | |
| Honeywell International Inc. | 2.12 | 1.85 | — | — | — | |
| Lockheed Martin Corp. | 7.12 | 6.12 | — | — | — | |
| RTX Corp. | 0.92 | 0.88 | — | — | — | |
| Equity Turnover, Sector | ||||||
| Capital Goods | 2.54 | 2.28 | — | — | — | |
| Equity Turnover, Industry | ||||||
| Industrials | 3.06 | 2.63 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Equity turnover = Net sales ÷ Stockholders’ equity
= 1,189,935 ÷ 1,268,491 = 0.94
2 Click competitor name to see calculations.
Between 2018 and 2022, a consistent upward trend in revenue generation and capital accumulation was observed. While both net sales and stockholders' equity grew over the five-year period, the rate of growth for equity occasionally outpaced sales expansion, resulting in fluctuations in the equity turnover ratio.
- Net Sales Performance
- A steady and significant increase in net sales is evident, rising from 420,068 thousand US$ in 2018 to 1,189,935 thousand US$ by the end of 2022. This represents a continuous trajectory of top-line growth over the analyzed period.
- Stockholders' Equity Expansion
- Stockholders' equity grew from 467,324 thousand US$ in 2018 to 1,268,491 thousand US$ in 2022. A notable surge occurred between 2019 and 2020, where equity increased from 543,495 thousand US$ to 976,255 thousand US$, indicating a substantial infusion of capital or a significant increase in retained earnings during that fiscal year.
- Equity Turnover Analysis
- The equity turnover ratio exhibited a non-linear trend. After an initial increase from 0.90 in 2018 to 0.98 in 2019, the ratio declined sharply to 0.70 in 2020. This decline coincided with the rapid expansion of stockholders' equity, which outstripped the growth in net sales for that period. However, a recovery phase followed, with the ratio improving to 0.82 in 2021 and further to 0.94 in 2022, suggesting an increasing efficiency in utilizing the expanded equity base to generate sales.
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