Cadence Design Systems Inc. (NASDAQ:CDNS)

Net Fixed Asset Turnover

The net fixed asset turnover ratio demonstrates a generally stable trend over the observed periods, fluctuating within a range of approximately 9.18 to 10.56. It starts at 9.18 and gradually increases to around 10.37 by mid-2022 before experiencing slight variability. This ratio peaks near the end of the timeline, reaching around 10.56, indicating a relatively efficient use of fixed assets to generate sales consistently through time.

Total Asset Turnover

Total asset turnover shows mild fluctuation with an overall modest upward trend in the initial periods, starting from 0.7 and rising to about 0.75 by mid-2022. However, after this peak, the ratio declines noticeably, dropping to 0.58 and then stabilizing around 0.54 in the later periods. This suggests a reduction in efficiency in using total assets to generate revenue after a certain point, with the latter values indicating a more cautious or less intensive asset utilization approach.

Equity Turnover

Equity turnover initially increases from 1.1 to a peak of approximately 1.3 around late 2022, reflecting improved efficiency in generating revenue from shareholders' equity. Subsequently, the ratio declines steadily, falling below 1.0 in the most recent periods, signaling a decreasing trend in equity utilization efficiency. The decrease may point toward increased equity base relative to revenues or a strategic shift affecting how equity supports revenue generation.

The financial data for the periods under review reveals several notable trends with respect to revenue, property, plant and equipment (net), and net fixed asset turnover ratios.

Revenue Trend

Revenue demonstrates an overall upward trajectory across the analyzed quarters. Starting from approximately 736 million USD in early 2021, it shows fluctuations but maintains growth momentum, reaching over 1.3 billion USD by late 2025. This indicates a strong expansion in sales or service income, peaking towards the end of the timeline with some seasonal or cyclical variances observed in periodic dips and recoveries.

Property, Plant and Equipment (Net)

The net value of property, plant, and equipment exhibits a steady increase over the periods. From just above 305 million USD at the beginning of the timeline, it grows consistently to nearly 495 million USD by the end of 2025. This rising trend suggests ongoing capital investments or asset acquisitions contributing to the company’s operational capacity and infrastructure expansion.

Net Fixed Asset Turnover

The net fixed asset turnover ratio fluctuates moderately but remains relatively stable around a range of approximately 9.1 to 10.6. Early periods begin near 9.2 and exhibit a gradual increase with some volatility. The ratio peaks at about 10.56 in 2025, indicating improved efficiency in utilizing fixed assets to generate revenue, despite the increase in asset base shown by property and equipment figures. Some temporary decreases in the ratio align with periods of increased capital expenditure, which is typical before new assets fully contribute to revenue generation.

Overall Insights

The consistent revenue growth combined with increasing fixed assets suggests sustained business expansion and investment in productive capacity. The steadiness and slight improvement in the net fixed asset turnover ratio indicate that asset utilization efficiency has been maintained, despite growth in the asset base. This balance between asset growth and revenue generation points to effective capital management and operational scaling over the observed time horizon.

The quarterly financial data reveals several notable trends in revenue, total assets, and asset turnover ratios over the examined periods.

Revenue

Revenue demonstrates an overall upward trajectory across the quarters. Initial values in early 2021 range around 0.73 billion US dollars, with minor fluctuations. From 2022 onwards, revenue growth becomes more pronounced, crossing the 1 billion threshold in the first quarter of 2023. The data for 2023 and 2024 suggest consistent growth with some variability, peaking notably at approximately 1.36 billion US dollars in the fourth quarter of 2024. This increasing trend indicates successful business expansion or improved sales performance over the analyzed period.

Total Assets

Total assets show a steady and significant increase over the span of the data. Starting from just below 4 billion US dollars in early 2021, total assets gradually rise, reaching approximately 5.7 billion by the end of 2023. Mid-2024 shows a substantial jump to over 7 billion US dollars, further increasing to nearly 9.6 billion by the last quarter of the dataset. This rapid asset growth in 2024 and into 2025 points to aggressive investment, acquisitions, or capital expansion contributing to the company's asset base.

Total Asset Turnover Ratio

The total asset turnover ratio, which measures efficiency in generating revenue from assets, fluctuates within a range from 0.47 to 0.75. In 2021 and early 2022, it remains relatively stable around 0.7 to 0.75, indicating consistent usage of assets to generate revenue. However, starting in 2024, the turnover ratio declines sharply to around 0.58 in the first quarter and further down to the high 0.4s and low 0.5s in subsequent quarters. Despite the increasing revenue, this decline suggests that asset growth has outpaced revenue growth, leading to reduced efficiency in asset utilization during this period.

In summary, the company shows strong revenue growth and notable asset accumulation over the reported quarters. However, the declining asset turnover ratio in later periods highlights potential challenges in converting the increased asset base into proportional revenue gains, warranting further investigation into asset management or capital allocation strategies.

The financial data reveals several noteworthy trends concerning revenue, stockholders’ equity, and equity turnover over multiple quarters.

Revenue

Revenue exhibited a general upward trajectory from April 2021 through December 2024, starting at approximately $736 million and reaching a peak around $1.36 billion in September 2024. This indicates substantial growth over the analyzed period. Although there are minor fluctuations quarter-to-quarter, the overall pattern shows consistent revenue expansion. Notably, after peaking near the end of 2024, revenue figures slightly declined but remained robust into 2025, maintaining levels above $1.2 billion.

Stockholders’ Equity

Stockholders’ equity also demonstrated a strong growth trend over the period. Beginning around $2.54 billion in April 2021, equity increased steadily to approximately $5.2 billion by September 2025. This near doubling of equity indicates significant accumulation of net assets or comprehensive income retained within the company, reflecting positive performance and strong capital base enhancement. Minor downticks are present in a few quarters but do not offset the overall ascending path.

Equity Turnover Ratio

The equity turnover ratio fluctuated throughout the quarters but remained generally within the range of 0.95 to 1.31. Initially, the ratio hovered just above 1.1 in early 2021, peaked near 1.3 by December 2022, then gradually declined towards 0.95 in late 2024. This declining trend suggests that while equity has grown considerably, revenue growth is not outpacing equity growth at the same rate in recent quarters. The ratio’s decrease implies a somewhat lower efficiency in generating revenue per unit of equity during the later periods compared to earlier ones.

In summary, the financial data shows a company with solid revenue growth and strong equity accumulation over the examined period. Nevertheless, the decline in the equity turnover ratio in recent quarters may warrant attention, as it reflects a relative decrease in how effectively equity is being utilized to generate revenues. Monitoring this indicator alongside revenue and equity levels will be important for assessing operational efficiency moving forward.