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)
Biogen Inc., long-term (investment) activity ratios
Based on: 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), 10-K (reporting date: 2017-12-31).
An evaluation of the long-term activity ratios from 2017 to 2021 reveals a period of relative stability followed by a noticeable decline in asset utilization efficiency toward the end of the timeframe. While several metrics peaked between 2019 and 2020, the 2021 fiscal year shows a consistent downward shift across all analyzed turnover categories.
- Fixed Asset Utilization
- The net fixed asset turnover ratio exhibited volatility, reaching a peak of 4.43 in 2019 before declining to 3.21 by 2021. When incorporating operating lease right-of-use assets, a more consistent downward trend is observed from 2019 (3.91) through 2021 (2.90). This suggests a decrease in the revenue generated per unit of fixed investment, potentially indicating an increase in the asset base that has not yet been matched by proportional revenue growth.
- Total Asset Efficiency
- Total asset turnover remained remarkably stable between 2017 and 2020, fluctuating minimally between 0.52 and 0.55. However, a significant contraction occurred in 2021, where the ratio fell to 0.46. This decline indicates a reduction in the overall efficiency with which the total asset base is being employed to generate sales.
- Equity Productivity
- Equity turnover showed a positive trajectory for the first four years of the period, rising from 0.97 in 2017 to a peak of 1.26 in 2020. This trend suggests an increasing ability to generate revenue from shareholder investments. However, this growth reversed in 2021, with the ratio dropping to 1.01, returning to levels similar to those seen in 2018.
The convergence of declining trends across fixed asset, total asset, and equity turnover in 2021 suggests a systemic reduction in investment activity efficiency. The disparity between the standard net fixed asset turnover and the version including right-of-use assets further highlights the impact of leased assets on the company's operational efficiency profile.
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Net Fixed Asset Turnover
Biogen Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | 10,981,700) | 13,444,600) | 14,377,900) | 13,452,900) | 12,273,900) | |
| Property, plant and equipment, net | 3,416,400) | 3,411,500) | 3,247,300) | 3,601,200) | 3,182,400) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 3.21 | 3.94 | 4.43 | 3.74 | 3.86 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| AbbVie Inc. | 11.00 | — | — | — | — | |
| Amgen Inc. | 4.69 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 7.67 | — | — | — | — | |
| Danaher Corp. | 7.77 | — | — | — | — | |
| Eli Lilly & Co. | 3.15 | — | — | — | — | |
| Gilead Sciences Inc. | 5.27 | — | — | — | — | |
| Johnson & Johnson | 4.95 | — | — | — | — | |
| Merck & Co. Inc. | 2.53 | — | — | — | — | |
| Pfizer Inc. | 5.52 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 4.62 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 4.71 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 6.92 | — | — | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 4.98 | — | — | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Health Care | 7.74 | — | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Net fixed asset turnover = Revenue ÷ Property, plant and equipment, net
= 10,981,700 ÷ 3,416,400 = 3.21
2 Click competitor name to see calculations.
The analysis of long-term investment activity reveals a period of fluctuating efficiency in the utilization of fixed assets to generate revenue between 2017 and 2021. While the organization achieved a peak in asset productivity in 2019, a subsequent decline in revenue led to a deterioration of the net fixed asset turnover ratio by the end of the period.
- Revenue Performance
- Revenue exhibited an upward trend from 2017 to 2019, rising from 12.27 billion to a peak of 14.38 billion. However, this trend reversed after 2019, with a notable contraction to 10.98 billion by December 31, 2021, representing a significant decrease in top-line performance.
- Fixed Asset Base
- Net property, plant, and equipment remained relatively stable over the five-year period, fluctuating within a narrow range between 3.18 billion and 3.60 billion. The asset base peaked in 2018 and remained nearly constant between 2020 and 2021, indicating a lack of significant expansion or divestment in long-term physical assets.
- Net Fixed Asset Turnover Trend
- The net fixed asset turnover ratio demonstrates a non-linear trajectory. The ratio initially dipped from 3.86 in 2017 to 3.74 in 2018, before climbing to a period high of 4.43 in 2019. This peak indicates the most efficient use of fixed assets to drive sales during the analyzed timeframe. Following 2019, the ratio declined to 3.94 in 2020 and further dropped to 3.21 in 2021.
- Efficiency Correlation
- The decline in the turnover ratio from 4.43 in 2019 to 3.21 in 2021 is primarily attributable to the reduction in revenue while the net fixed asset base remained stagnant. This divergence suggests a decrease in the productivity of the company's long-term physical investments relative to its sales output.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Biogen Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | 10,981,700) | 13,444,600) | 14,377,900) | 13,452,900) | 12,273,900) | |
| Property, plant and equipment, net | 3,416,400) | 3,411,500) | 3,247,300) | 3,601,200) | 3,182,400) | |
| Operating lease assets | 375,400) | 433,300) | 427,000) | —) | —) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 3,791,800) | 3,844,800) | 3,674,300) | 3,601,200) | 3,182,400) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 2.90 | 3.50 | 3.91 | 3.74 | 3.86 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| AbbVie Inc. | 9.57 | — | — | — | — | |
| Amgen Inc. | 4.23 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 6.66 | — | — | — | — | |
| Danaher Corp. | 6.10 | — | — | — | — | |
| Eli Lilly & Co. | 2.93 | — | — | — | — | |
| Gilead Sciences Inc. | 4.77 | — | — | — | — | |
| Johnson & Johnson | 4.72 | — | — | — | — | |
| Merck & Co. Inc. | 2.33 | — | — | — | — | |
| Pfizer Inc. | 4.64 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 4.52 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 3.98 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 5.32 | — | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 4.45 | — | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Health Care | 6.75 | — | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenue ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= 10,981,700 ÷ 3,791,800 = 2.90
2 Click competitor name to see calculations.
The analysis of investment activity from 2017 to 2021 reveals a deteriorating relationship between fixed asset utilization and revenue generation. While the asset base grew steadily for most of the period, revenue peaked in 2019 and declined significantly thereafter, leading to a contraction in the net fixed asset turnover ratio.
- Revenue Trends
- Revenue experienced an upward trajectory from 2017 to 2019, rising from 12.27 billion USD to a peak of 14.38 billion USD. However, this trend reversed in 2020, with revenue falling to 13.44 billion USD, followed by a sharp contraction to 10.98 billion USD by the end of 2021. This represents a substantial decline in top-line performance in the final two years of the observed period.
- Net Fixed Asset Base Evolution
- Property, plant, and equipment, including right-of-use assets, showed a consistent increase from 2017 (3.18 billion USD) through 2020 (3.84 billion USD). The asset base remained relatively stable in 2021, ending at 3.79 billion USD. The steady growth in the asset base during the initial four years suggests ongoing capital investment or the recognition of lease assets.
- Net Fixed Asset Turnover Analysis
- The net fixed asset turnover ratio remained relatively stable between 2017 and 2019, fluctuating between 3.74 and 3.91, which indicates a consistent level of efficiency in utilizing fixed assets to generate sales. A downward trend emerged in 2020 as the ratio dropped to 3.50, accelerating in 2021 to a period low of 2.90. This decline is primarily driven by the divergence between a stagnant asset base and rapidly declining revenues, signifying a reduction in the productivity of the company's long-term investments.
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Total Asset Turnover
Biogen Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | 10,981,700) | 13,444,600) | 14,377,900) | 13,452,900) | 12,273,900) | |
| Total assets | 23,877,300) | 24,618,900) | 27,234,300) | 25,288,900) | 23,652,600) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.46 | 0.55 | 0.53 | 0.53 | 0.52 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| AbbVie Inc. | 0.38 | — | — | — | — | |
| Amgen Inc. | 0.40 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 0.42 | — | — | — | — | |
| Danaher Corp. | 0.35 | — | — | — | — | |
| Eli Lilly & Co. | 0.58 | — | — | — | — | |
| Gilead Sciences Inc. | 0.40 | — | — | — | — | |
| Johnson & Johnson | 0.52 | — | — | — | — | |
| Merck & Co. Inc. | 0.46 | — | — | — | — | |
| Pfizer Inc. | 0.45 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.63 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.41 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.56 | — | — | — | — | |
| Total Asset Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.45 | — | — | — | — | |
| Total Asset Turnover, Industry | ||||||
| Health Care | 0.62 | — | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Total asset turnover = Revenue ÷ Total assets
= 10,981,700 ÷ 23,877,300 = 0.46
2 Click competitor name to see calculations.
An analysis of the financial performance from 2017 to 2021 reveals a period of moderate growth followed by a significant contraction in both revenue and asset utilization efficiency. While the company maintained a stable relationship between its asset base and revenue generation for the first four years, a sharp decline occurred in the final year of the period.
- Revenue Trajectory
- Revenue experienced a steady increase from 2017 to 2019, rising from US$ 12.27 billion to a peak of US$ 14.38 billion. This growth trend reversed in 2020, with revenue declining to US$ 13.44 billion, followed by a more substantial contraction in 2021, where revenue fell to US$ 10.98 billion.
- Total Asset Evolution
- Total assets mirrored the revenue trend initially, growing from US$ 23.65 billion in 2017 to a peak of US$ 27.23 billion in 2019. A downward adjustment in the asset base followed, with values decreasing to US$ 24.62 billion in 2020 and US$ 23.88 billion by the end of 2021.
- Total Asset Turnover Analysis
- The total asset turnover ratio remained remarkably consistent between 2017 and 2020, fluctuating narrowly between 0.52 and 0.55. This indicates that the company successfully scaled its assets in proportion to its revenue growth during this phase. However, in 2021, the ratio dropped to 0.46, the lowest point in the five-year period. This decline suggests that the reduction in revenue outpaced the reduction in total assets, resulting in a diminished capacity to generate sales from the existing asset base.
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Equity Turnover
Biogen Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | 10,981,700) | 13,444,600) | 14,377,900) | 13,452,900) | 12,273,900) | |
| Total Biogen Inc. shareholders’ equity | 10,896,200) | 10,700,300) | 13,343,200) | 13,039,600) | 12,612,800) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 1.01 | 1.26 | 1.08 | 1.03 | 0.97 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| AbbVie Inc. | 3.65 | — | — | — | — | |
| Amgen Inc. | 3.63 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 1.29 | — | — | — | — | |
| Danaher Corp. | 0.65 | — | — | — | — | |
| Eli Lilly & Co. | 3.15 | — | — | — | — | |
| Gilead Sciences Inc. | 1.28 | — | — | — | — | |
| Johnson & Johnson | 1.27 | — | — | — | — | |
| Merck & Co. Inc. | 1.28 | — | — | — | — | |
| Pfizer Inc. | 1.06 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.86 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.96 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.75 | — | — | — | — | |
| Equity Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 1.27 | — | — | — | — | |
| Equity Turnover, Industry | ||||||
| Health Care | 1.67 | — | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Equity turnover = Revenue ÷ Total Biogen Inc. shareholders’ equity
= 10,981,700 ÷ 10,896,200 = 1.01
2 Click competitor name to see calculations.
The analysis of equity turnover from 2017 to 2021 reveals a period of fluctuating asset efficiency, characterized by an initial upward trend, a significant peak in 2020, and a subsequent correction in 2021.
- Revenue Trajectory
- Revenue exhibited steady growth through 2019, rising from 12.27 billion USD in 2017 to a peak of 14.38 billion USD. A reversal occurred in 2020, with revenues declining to 13.44 billion USD, and a more pronounced downward trend followed in 2021, with revenue falling to 10.98 billion USD.
- Shareholders' Equity Dynamics
- Total shareholders' equity increased gradually between 2017 and 2019, reaching 13.34 billion USD. A substantial contraction is observed in 2020, where equity dropped to 10.70 billion USD, followed by a marginal recovery to 10.90 billion USD by the end of 2021.
- Equity Turnover Interpretation
- The equity turnover ratio improved from 0.97 in 2017 to 1.08 in 2019, reflecting a positive correlation between revenue growth and capital utilization. The ratio peaked at 1.26 in 2020; however, this spike was primarily the result of the significant decrease in the equity base rather than an increase in operational performance. By 2021, the ratio normalized to 1.01, as the decline in revenue offset the stability of the equity levels.
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