Analysis of Property, Plant and Equipment
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Etsy Inc. pages available for free this week:
- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Total Asset Turnover since 2015
- Price to Earnings (P/E) since 2015
- Price to Operating Profit (P/OP) since 2015
- Analysis of Revenues
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Property, Plant and Equipment Disclosure
Etsy Inc., balance sheet: property, plant and equipment
US$ in thousands
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).
- Computer Equipment
- The value of computer equipment shows a declining trend over the five-year period, starting at $35,587 thousand in 2017 and decreasing steadily to $8,037 thousand by 2021. This represents a significant reduction, particularly evident in the sharp decrease between 2020 and 2021.
- Furniture and Equipment
- Furniture and equipment experienced moderate fluctuations, increasing from $6,194 thousand in 2017 to a peak of $7,999 thousand in 2019, followed by a slight decline to $7,170 thousand in 2021. Overall, the values remained relatively stable with minor variations.
- Software
- Data for software is only available for 2017, where it was reported at $908 thousand. Thereafter, no values are recorded, indicating either discontinuation of this specific classification or reclassification under other headings in subsequent years.
- Leasehold Improvements
- Leasehold improvements show a dramatic increase between 2018 and 2019, rising from $10,731 thousand to $48,688 thousand. This elevated level is maintained through 2020 and slightly declines to $48,145 thousand in 2021, suggesting major capital investments in leasehold assets within this period.
- Construction in Progress
- This category exhibits growth commencing in 2018 with $551 thousand, increasing gradually through 2020, and showing a substantial jump in 2021 to $10,835 thousand. The upward trend indicates ongoing development projects or asset expansions progressing toward completion.
- Building
- The value of buildings remained steady at $81,892 thousand for 2017 and 2018, then decreased to $66,650 thousand in 2019 and 2020, followed by a significant increase to $133,063 thousand in 2021. This pattern suggests disposals or write-downs earlier followed by major acquisitions or revaluations in the latest year.
- Website Development and Internal-Use Software
- This asset category consistently grew over the period, starting at $48,333 thousand in 2017 and more than quadrupling to $224,855 thousand by 2021. The continuous increase points to sustained investment in digital assets, reflecting the importance of internal software and website capabilities to the company’s operations.
- Property and Equipment, Gross
- Gross property and equipment showed steady growth, increasing from $183,843 thousand in 2017 to $432,105 thousand in 2021. This notably large increase, especially in the final years, demonstrates substantial capital expenditure and asset accumulation.
- Accumulated Depreciation and Amortization
- Accumulated depreciation and amortization grew consistently from -$66,226 thousand in 2017 to a peak of -$158,771 thousand in 2020, with a slight reduction to -$157,043 thousand in 2021. The rising magnitude reflects ongoing wear and usage of assets, although the minor decrease in 2021 may suggest adjustments or asset retirements.
- Property and Equipment, Net
- Net property and equipment values exhibited moderate increases in early years, from $117,617 thousand in 2017 to $144,864 thousand in 2019, followed by a decline to $112,495 thousand in 2020. However, in 2021, the net value surged significantly to $275,062 thousand, indicating a renewal or expansion of the asset base after a temporary decrease.
Asset Age Ratios (Summary)
Etsy Inc., asset age 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).
- Average Age Ratio
- The average age ratio exhibited an overall increase from 36.02% in 2017 to a peak of 58.53% in 2020, indicating an aging asset base during this period. However, in 2021, there was a significant decline to 36.34%, suggesting a refresh or replacement of assets.
- Estimated Total Useful Life
- The estimated total useful life of the assets fluctuated, starting at 8 years in 2017 and rising to 9 years in 2018. It then dropped to 7 years in 2019 and further decreased to 6 years in 2020, before increasing again to 9 years in 2021. This variation may reflect changes in asset acquisition strategies, asset types, or reassessments of asset longevity.
- Estimated Age (Time Elapsed Since Purchase)
- The estimated age displayed minor fluctuations, with assets aging from 3 years in 2017 to 4 years in 2018, back to 3 years in 2019, increasing again to 4 years in 2020, and returning to 3 years in 2021. These changes indicate periodic acquisition or retirement of assets, maintaining a relatively steady asset turnover.
- Estimated Remaining Life
- The estimated remaining life of assets generally declined from 5 years in 2017 and 2018 to 4 years in 2019, and further to 3 years in 2020. In 2021, however, it increased sharply to 6 years, which aligns with the observed renewal of assets and the increased total useful life, suggesting a strategic refresh of the property, plant, and equipment during the last period under review.
Average Age
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).
2021 Calculations
1 Average age = 100 × Accumulated depreciation and amortization ÷ Property and equipment, gross
= 100 × ÷ =
- Accumulated Depreciation and Amortization
- The accumulated depreciation and amortization increased consistently from 66,226 thousand US dollars in 2017 to 158,771 thousand in 2020. However, there was a slight decrease in 2021, ending at 157,043 thousand. This trend indicates ongoing usage and aging of property and equipment, with high levels of depreciation accumulated over the years, and a minor reduction in depreciation expenses or write-offs in the last year observed.
- Property and Equipment, Gross
- The gross value of property and equipment showed a steady upward trend from 183,843 thousand US dollars in 2017 to 271,266 thousand in 2020, followed by a significant increase in 2021 to 432,105 thousand. This sharp rise suggests substantial capital investments or acquisitions of property and equipment in the final year, reflecting expansion or upgrading of physical assets.
- Average Age Ratio
- The average age ratio, representing the proportion of accumulated depreciation to gross property and equipment, increased steadily from 36.02% in 2017 to a peak of 58.53% in 2020. This indicates aging assets over these years. However, this ratio declined markedly to 36.34% in 2021, suggesting that the new investments in property and equipment in 2021 substantially lowered the average age of the asset base.
Estimated Total Useful Life
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).
2021 Calculations
1 Estimated total useful life = Property and equipment, gross ÷ Depreciation and amortization expense on property and equipment
= ÷ =
- Property and Equipment, Gross
- The gross value of property and equipment exhibited a consistent upward trend over the period from 2017 to 2021. Starting at 183,843 thousand US dollars in 2017, this figure increased annually, reaching 432,105 thousand US dollars by the end of 2021. The most notable growth occurred between 2020 and 2021, where the gross value rose sharply by approximately 60%. This suggests significant investments or acquisitions contributing to the expansion of the company's asset base in the latest period.
- Depreciation and Amortization Expense
- The depreciation and amortization expense on property and equipment demonstrated fluctuations with an overall increasing trend. After a slight decrease from 23,800 thousand US dollars in 2017 to 22,400 thousand US dollars in 2018, it rose significantly in subsequent years, reaching 45,800 thousand US dollars by 2021. The rise between 2018 and 2019 was particularly marked, reflecting possibly larger asset base or changes in depreciation policies.
- Estimated Total Useful Life
- The estimated total useful life of the property and equipment showed variability rather than a consistent pattern. Starting at 8 years in 2017, it increased to 9 years in 2018, dropped to 7 years in 2019, decreased further to 6 years in 2020, and then rose back to 9 years in 2021. These fluctuations might indicate adjustments in management’s assumptions regarding asset longevity, potentially influenced by changes in asset composition, technological developments, or revised depreciation methodologies.
- Summary
- Overall, the data reveals substantial growth in the company's gross property and equipment assets, accompanied by rising depreciation expenses that lag slightly behind asset growth. The estimated useful life of these assets varied over the years, influencing depreciation calculations and asset management strategies. The significant increase in asset value and depreciation expense in the latest year indicates an expansion phase, while the fluctuating useful life points to strategic reassessments in asset valuation practices.
Estimated Age, Time Elapsed since Purchase
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).
2021 Calculations
1 Time elapsed since purchase = Accumulated depreciation and amortization ÷ Depreciation and amortization expense on property and equipment
= ÷ =
- Accumulated Depreciation and Amortization
- The accumulated depreciation and amortization amount increased steadily from US$66,226 thousand in 2017 to a peak of US$158,771 thousand in 2020, showing consistent growth in asset depreciation over four years. In 2021, a slight decline to US$157,043 thousand was observed, indicating a possible reduction in depreciation accumulation or disposal of assets.
- Depreciation and Amortization Expense on Property and Equipment
- This expense showed some fluctuation over the years, starting at US$23,800 thousand in 2017 and decreasing slightly to US$22,400 thousand in 2018. It then experienced a significant increase to US$38,400 thousand in 2019, continuing to rise moderately to US$43,000 thousand in 2020 and further to US$45,800 thousand in 2021. This trend reflects increased depreciation charges, potentially due to asset acquisitions or changes in depreciation methods.
- Time Elapsed Since Purchase
- The time elapsed since purchase alternated between 3 and 4 years across the periods, with 3 years recorded in 2017, 2019, and 2021, and 4 years in 2018 and 2020. This pattern may indicate a consistent asset renewal cycle or the average age of the assets being evaluated.
Estimated Remaining Life
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).
2021 Calculations
1 Estimated remaining life = Property and equipment, net ÷ Depreciation and amortization expense on property and equipment
= ÷ =
- Property and Equipment, Net
- The net value of property and equipment initially increased modestly from 117,617 thousand US dollars in 2017 to 120,179 thousand US dollars in 2018. A more substantial increase occurred in 2019, reaching 144,864 thousand US dollars. However, there was a significant decline in 2020 to 112,495 thousand US dollars, followed by a pronounced recovery and sharp growth in 2021 to 275,062 thousand US dollars, more than doubling the prior year's figure.
- Depreciation and Amortization Expense on Property and Equipment
- Depreciation and amortization expenses showed a fluctuating yet generally ascending trend over the period. The expense decreased slightly from 23,800 thousand US dollars in 2017 to 22,400 thousand US dollars in 2018. Subsequently, a significant rise occurred in 2019 to 38,400 thousand US dollars, continuing to increase to 43,000 thousand US dollars in 2020 and reaching 45,800 thousand US dollars in 2021. This suggests increasing charges related to asset usage or the impact of newly capitalized assets.
- Estimated Remaining Life
- The estimated remaining life of property and equipment remained steady at 5 years through 2017 and 2018, then declined to 4 years in 2019 and further dropped to 3 years in 2020. In 2021, the estimated remaining life significantly increased to 6 years, indicating possible new acquisitions, asset revaluations, or changes in asset composition that extended the average useful life.