Dollar Tree Inc. (NASDAQ:DLTR)

Net fixed asset turnover

The net fixed asset turnover ratio exhibited a general declining trend over the analyzed period. Starting at 6.65 in early 2017, it slightly increased to 6.95 in early 2018 before gradually decreasing to 5.88 by early 2022. This indicates that the efficiency in generating sales from net fixed assets has diminished modestly over time.

Net fixed asset turnover (including operating lease, right-of-use asset)

In contrast, when including operating lease right-of-use assets, there is a notable drop starting from 2020. The ratio remains stable and identical to the traditional net fixed asset turnover ratio before 2020 (6.65 to 6.62). However, from 2020 onward, it declines sharply to around 2.3-2.4, remaining consistently low thereafter. This suggests a significant impact of accounting changes related to lease capitalization on asset turnover, reflecting increased asset bases without a proportionate increase in sales.

Total asset turnover

Total asset turnover shows some variability with an initial slight increase from 1.32 in 2017 to a peak of 1.69 in 2019, indicating improved utilization of total assets during this period. However, this is followed by a decline to around 1.21-1.23 from 2020 to 2022. The decrease post-2019 may suggest either increased asset levels not fully supported by sales growth or challenges in asset utilization efficiency.

Equity turnover

Equity turnover exhibits fluctuations throughout the period, starting at 3.84 in 2017 and then declining to 3.10 in 2018. It recovers to a peak of 4.04 in 2019, before gradually declining again to 3.41 by 2022. This pattern indicates changes in how effectively equity is being employed to generate sales, with the highest efficiency around 2019 and softer performance in later years.

Net Sales

Over the six-year period, net sales demonstrated a consistent upward trend, increasing from approximately 20.72 billion USD in early 2017 to around 26.31 billion USD by early 2022. The growth was steady each year, with the most significant jump occurring between 2020 and 2021, indicating a possible acceleration in revenue generation during this period.

Property, Plant and Equipment, Net

The net value of property, plant, and equipment showed a progressive increase from about 3.12 billion USD in 2017 to nearly 4.48 billion USD in 2022. This steady investment in fixed assets suggests ongoing expansion or modernization efforts, with a notable rise between 2019 and 2020 and continuing thereafter.

Net Fixed Asset Turnover Ratio

The net fixed asset turnover ratio, which indicates how efficiently the company uses its fixed assets to generate sales, displayed a gradual decline over the period. Starting at 6.65 in 2017, it peaked slightly at 6.95 in 2018 before generally declining to 5.88 in 2022. This downward trend suggests a decreasing efficiency in the utilization of fixed assets, potentially due to the rapid asset base growth outpacing sales increases or a shift in operational dynamics.

The financial data exhibits clear trends across multiple years with respect to net sales, property, plant and equipment, and net fixed asset turnover ratios.

Net Sales

Net sales demonstrate a steady upward trajectory from 20,719.2 million USD in early 2017 to 26,309.8 million USD by early 2022. This consistent growth indicates positive revenue expansion over the six-year period, with no evident declines or volatility.

Property, Plant and Equipment (Net of Accumulated Depreciation, Including Operating Lease, Right-of-Use Asset)

The net value of property, plant, and equipment remains relatively stable in the first three years, increasing modestly from approximately 3,115.8 million USD in 2017 to 3,445.3 million USD in 2019. A significant inflection occurs in 2020, where this asset base nearly triples to over 10 billion USD and continues to increase slightly in subsequent years, reaching approximately 10,902.6 million USD by 2022. This substantial increase suggests major investments or capitalization of leased assets beginning in 2020.

Net Fixed Asset Turnover

The net fixed asset turnover ratio, which measures the efficiency in generating sales from fixed assets, decreases sharply starting in 2020. While ratios were relatively high and stable from 6.65 in 2017 to about 6.62 in 2019, reflecting efficient use of assets, the ratio dramatically drops to 2.34 in 2020 and remains low (2.41 to 2.44) through 2022. This decline correlates with the large increase in fixed assets noted above, indicating that asset growth has outpaced sales growth, resulting in lowered efficiency in asset utilization for revenue generation during the later years.

Net Sales

The net sales of the company demonstrated a consistent upward trend over the periods analyzed. Starting from approximately $20.72 billion in January 2017, the figure increased steadily each year, reaching around $26.31 billion by January 2022. This growth indicates a positive sales performance with an overall increase of about 27% across the six-year span.

Total Assets

Total assets exhibited some fluctuations throughout the periods. Initially, assets rose slightly from $15.70 billion in January 2017 to approximately $16.33 billion in February 2018. However, a significant decline was observed in February 2019 where assets decreased to about $13.50 billion. Following this drop, total assets surged sharply in February 2020 to $19.57 billion and continued to increase gradually, reaching roughly $21.72 billion by January 2022. This pattern suggests a period of asset reduction or divestment in 2019, followed by considerable asset growth and expansion thereafter.

Total Asset Turnover

The total asset turnover ratio experienced variability during the analyzed timeline. It increased from 1.32 in January 2017 to a peak of 1.69 in February 2019, reflecting improved efficiency in utilizing assets to generate sales during that period. Subsequently, this ratio declined to 1.21 by February 2020 and remained relatively stable through January 2022. The initial increase followed by a decline suggests that despite the expansion in assets after 2019, the efficiency of asset use to generate sales decreased and then stabilized at a lower level.

Net Sales

Over the analyzed periods, net sales demonstrate a consistent upward trend, increasing from approximately $20.7 billion in early 2017 to about $26.3 billion by early 2022. This reflects sustained growth in revenue generation over the five-year span, with noticeable increases each year. The most significant jump occurred between the fiscal years ending in early 2020 and 2021, indicating accelerated sales growth during that interval.

Shareholders’ Equity

Shareholders' equity experiences a more variable trajectory. Initially, equity increased markedly from $5.39 billion in 2017 to $7.18 billion in early 2018. This was followed by a decline to approximately $5.64 billion in 2019. Subsequently, it recovered and grew steadily over the next three years, reaching $7.72 billion by early 2022. These fluctuations suggest periods of financial restructuring or changes in retained earnings and equity financing.

Equity Turnover Ratio

The equity turnover ratio, an indicator of how efficiently the company uses its equity to generate sales, shows notable volatility. Starting at 3.84 in 2017, it declined to 3.1 in 2018, indicating reduced efficiency. It then increased sharply to 4.04 in 2019 before gradually decreasing to 3.41 by early 2022. Despite fluctuations, the ratio remains above 3 in all years, reflecting consistent, though variable, management effectiveness in utilizing equity to support net sales.

Summary of Trends

The financial data reveals steady revenue growth accompanied by fluctuating equity levels, suggesting active capital management. The variation in the equity turnover ratio highlights periods of changing operational efficiency relative to equity investment. Overall, the company demonstrates an ability to increase sales sustainably, while managing equity to balance growth and efficiency.