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.
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- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Enterprise Value (EV)
- Dividend Discount Model (DDM)
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
- Analysis of Revenues
- Analysis of Debt
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Long-term Activity Ratios (Summary)
Cadence Design Systems Inc., long-term (investment) activity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 10-K (reporting date: 2024-12-31), 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).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio experienced a general upward trend from 8.62 in 2020 to 10.13 in 2024, with a slight dip in 2022 to 9.59 after rising to 9.77 in 2021. This indicates an improvement in the company's efficiency in generating sales from its fixed assets over the observed period.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- This adjusted net fixed asset turnover ratio also showed overall growth, increasing from 6.04 in 2020 to 7.68 in 2024. The ratio rose steadily from 2020 to 2021, experienced a small decline in 2022, and then continued to increase through 2023 and 2024. This highlights enhanced asset utilization when accounting for operating leases.
- Total Asset Turnover
- The total asset turnover ratio remained stable around 0.68–0.69 during 2020 to 2022, followed by a moderate rise to 0.72 in 2023. However, a notable decrease to 0.52 occurred in 2024. This pattern may suggest a decline in overall asset efficiency in the latest year after a period of relative stability and improvement.
- Equity Turnover
- Equity turnover showed an increasing trend from 1.08 in 2020 to 1.30 in 2022, decreasing slightly to 1.20 in 2023 and then further down to 0.99 in 2024. This indicates that the rate at which equity generated revenues peaked in 2022 and declined in subsequent years, possibly reflecting changes in equity base or revenue generation efficiency.
Net Fixed Asset Turnover
Cadence Design Systems Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | ||||||
| Property, plant and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Software & Services | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Net fixed asset turnover = Revenue ÷ Property, plant and equipment, net
= ÷ =
2 Click competitor name to see calculations.
- Revenue
- The revenue shows a consistent upward trajectory throughout the five-year period. From 2020 to 2024, revenue increased from approximately 2.68 billion US dollars to about 4.64 billion US dollars, reflecting significant growth. The annual increments indicate a steady expansion in business operations and market demand, with especially notable increases occurring between 2021 and 2022, and between 2023 and 2024.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment experienced a slight decline from 311.1 million USD in 2020 to 305.9 million USD in 2021, before rising substantially over the subsequent years. By 2024, this asset category grew to 458.2 million USD. This pattern suggests initial divestment or depreciation effects in 2021, followed by renewed investment in capital assets, aligning with the ongoing business growth.
- Net Fixed Asset Turnover
- This ratio, which measures revenue generated per unit of net fixed assets, demonstrates overall improvement from 8.62 in 2020 to around 10.13 by 2024. Despite a slight dip in 2022, the ratio maintains an upward trend, indicating increasingly efficient use of fixed assets to generate revenue. The peak turnover in 2023 suggests optimized asset utilization during that period.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Cadence Design Systems Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | ||||||
| Property, plant and equipment, net | ||||||
| ROU operating lease assets | ||||||
| Property, plant and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Software & Services | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 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)
= ÷ =
2 Click competitor name to see calculations.
- Revenue
- The revenue demonstrates a consistent upward trend over the five-year period, increasing from $2,682,891 thousand in 2020 to $4,641,264 thousand in 2024. This reflects a substantial growth trajectory, with each year recording higher revenue than the previous one. The annual increases suggest effective revenue expansion strategies or favorable market conditions contributing to steady top-line growth.
- Property, plant and equipment, net (including operating lease, right-of-use asset)
- The net value of property, plant, and equipment shows some fluctuations initially, decreasing slightly from $444,479 thousand in 2020 to $436,035 thousand in 2021, then increasing significantly in the following years to reach $604,390 thousand by 2024. This pattern indicates an initial divestment or revaluation followed by increased investments or acquisitions of fixed assets, supporting capacity expansion or technological upgrades.
- Net fixed asset turnover (including operating lease, right-of-use asset)
- The net fixed asset turnover ratio, which measures efficiency in using fixed assets to generate revenue, exhibits an overall improving trend across the period. Starting at 6.04 in 2020, it rises to 6.85 in 2021, dips slightly to 6.57 in 2022, but then increases again to reach the highest value of 7.68 in 2024. The improvement suggests enhanced asset utilization efficiency, enabling higher revenue production per unit of fixed asset value over time.
Total Asset Turnover
Cadence Design Systems Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Total Asset Turnover, Sector | ||||||
| Software & Services | ||||||
| Total Asset Turnover, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Total asset turnover = Revenue ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Revenue Trends
- Revenue has shown consistent growth over the five-year period, increasing from approximately $2.68 billion in 2020 to around $4.64 billion in 2024. This represents a significant upward trend, with year-over-year growth accelerating notably after 2022.
- Total Assets Development
- Total assets have increased steadily from about $3.95 billion in 2020 to approximately $8.97 billion by 2024. The growth accelerated markedly between 2023 and 2024, indicating significant asset accumulation in the most recent period.
- Total Asset Turnover Analysis
- The total asset turnover ratio remained relatively stable between 2020 and 2023, fluctuating slightly from 0.68 to 0.72. However, this ratio dropped sharply to 0.52 in 2024, suggesting a decrease in asset utilization efficiency despite the growth in revenue and asset base.
- Summary of Observations
- The overall financial data indicates strong revenue growth accompanied by substantial asset expansion. The decline in asset turnover in the final year suggests that the company is generating relatively less revenue per dollar of assets than in previous years. This may reflect recent investments that have yet to fully contribute to revenue, or a strategic shift that impacts asset utilization. Continuous monitoring of this ratio will be necessary to assess future operational efficiency and the return on asset investments.
Equity Turnover
Cadence Design Systems Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | ||||||
| Stockholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Equity Turnover, Sector | ||||||
| Software & Services | ||||||
| Equity Turnover, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Equity turnover = Revenue ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Revenue Trend
- The revenue shows a consistent upward trend over the five-year period. Starting at approximately $2.68 billion in 2020, it increased steadily each year to reach approximately $4.64 billion by the end of 2024. This represents an overall increase of around 73% over the period, indicating strong growth in sales or operating activities.
- Stockholders’ Equity Trend
- Stockholders' equity exhibits a significant growth trajectory across the reviewed years. Beginning at about $2.49 billion in 2020, equity rose steadily to $4.67 billion by 2024. The increase is especially notable from 2022 to 2024, where equity expanded from approximately $2.75 billion to $4.67 billion, signaling potential capital retention or reinvestment of earnings and possibly new equity injections.
- Equity Turnover Ratio
- The equity turnover ratio, which measures how effectively the company utilizes shareholders' equity to generate revenue, showed variability throughout the period. It was relatively stable around 1.08-1.09 in 2020 and 2021, peaked at 1.3 in 2022, then declined to 1.2 in 2023 and further decreased to 0.99 in 2024. This downward trend in the last two years suggests a relative decline in the efficiency of equity usage to generate revenue despite ongoing revenue growth.
- Overall Analysis
- The data indicates robust growth in both revenue and equity, reflecting an expanding business with a solid capital base. However, the declining equity turnover ratio in recent years points to a need to monitor operational efficiency or capital allocation strategies. The company’s revenue growth outpaces the gains in equity turnover efficiency, which could imply that while the top line is growing, the incremental equity is not being leveraged as effectively to produce proportional additional revenue as in previous years.