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)
Express Scripts Holding Co., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
The analysis of investment activity ratios from 2013 to 2017 reveals a divergence between total asset efficiency and the utilization of specific asset classes. While overall asset turnover remained stable, there was a dramatic increase in the efficiency of net fixed assets and a fluctuating trend in equity utilization.
- Net Fixed Asset Turnover
- A strong upward trend is observed in the net fixed asset turnover ratio. The ratio grew modestly from 62.75 in 2013 to 78.74 in 2016, followed by a substantial acceleration in 2017, reaching 181.51. This sharp increase suggests a significant reduction in the net book value of fixed assets relative to revenue or a rapid expansion of sales without corresponding investment in fixed infrastructure.
- Total Asset Turnover
- The total asset turnover ratio exhibited high stability throughout the five-year period. Values fluctuated within a narrow range, starting at 1.94 in 2013, dipping slightly to 1.88 in 2014, and ending at 1.84 in 2017. This consistency indicates that the overall efficiency of the company's total asset base in generating revenue remained largely unchanged.
- Equity Turnover
- Equity turnover demonstrated a period of growth followed by a moderate decline. The ratio climbed steadily from 4.77 in 2013 to a peak of 6.18 in 2016, indicating an increasing ability to generate revenue from shareholders' equity. However, this trend reversed in 2017, with the ratio decreasing to 5.52.
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Net Fixed Asset Turnover
Express Scripts Holding Co., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 100,064,600) | 100,287,500) | 101,751,800) | 100,887,100) | 104,098,800) | |
| Property and equipment, net | 551,300) | 1,273,600) | 1,291,300) | 1,584,000) | 1,658,900) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 181.51 | 78.74 | 78.80 | 63.69 | 62.75 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Net fixed asset turnover = Revenues ÷ Property and equipment, net
= 100,064,600 ÷ 551,300 = 181.51
2 Click competitor name to see calculations.
Between 2013 and 2017, a significant divergence is observed between the stability of revenue generation and the reduction of net fixed assets. While revenues remained relatively stagnant, the company experienced a consistent decrease in its investment in property and equipment, resulting in a substantial increase in asset efficiency as measured by the net fixed asset turnover ratio.
- Revenue Stability
- Revenues exhibited minimal volatility throughout the five-year period, fluctuating within a narrow range between approximately 100 billion and 104 billion US dollars. This indicates a period of stagnant top-line growth, where the company maintained a consistent scale of operations.
- Net Fixed Asset Reduction
- A continuous downward trend in net property and equipment is evident. The value decreased from 1.66 billion US dollars in 2013 to 551.3 million US dollars in 2017. The most pronounced decline occurred between 2016 and 2017, where net fixed assets were reduced by more than 50%.
- Net Fixed Asset Turnover Acceleration
- The net fixed asset turnover ratio increased from 62.75 in 2013 to 181.51 in 2017. This sharp upward trajectory is primarily driven by the aggressive reduction in the asset base rather than revenue growth. The surge in the ratio suggests a shift toward an asset-light operational model or significant divestment of physical infrastructure while maintaining the same level of revenue output.
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Total Asset Turnover
Express Scripts Holding Co., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 100,064,600) | 100,287,500) | 101,751,800) | 100,887,100) | 104,098,800) | |
| Total assets | 54,255,800) | 51,744,900) | 53,243,300) | 53,798,900) | 53,548,200) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 1.84 | 1.94 | 1.91 | 1.88 | 1.94 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Total asset turnover = Revenues ÷ Total assets
= 100,064,600 ÷ 54,255,800 = 1.84
2 Click competitor name to see calculations.
The financial performance from 2013 to 2017 indicates a period of relative stability in both revenue generation and asset management. The total asset turnover ratio remained consistently high, suggesting a disciplined approach to asset utilization despite a lack of significant top-line growth.
- Revenue Trends
- Annual revenues exhibited a marginal downward trajectory over the observed period, decreasing from 104.1 billion USD in 2013 to 100.1 billion USD in 2017. Although a slight recovery occurred in 2015, the overall pattern reflects revenue stagnation, with figures consistently hovering around the 100 billion USD mark.
- Asset Base Stability
- Total assets remained relatively constant, fluctuating within a narrow range between a low of 51.7 billion USD in 2016 and a high of 54.3 billion USD in 2017. This stability indicates that the company did not engage in significant capital expansion or large-scale divestment during this five-year window.
- Total Asset Turnover Analysis
- The total asset turnover ratio fluctuated between a high of 1.94 and a low of 1.84. The efficiency of asset utilization peaked in 2013 and 2016 at 1.94. A decline to 1.84 was recorded in 2017, which is attributable to the simultaneous occurrence of an increase in total assets and a slight decrease in annual revenues, resulting in a lower efficiency of revenue generation per unit of asset.
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Equity Turnover
Express Scripts Holding Co., equity turnover calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 100,064,600) | 100,287,500) | 101,751,800) | 100,887,100) | 104,098,800) | |
| Total Express Scripts stockholders’ equity | 18,119,600) | 16,236,000) | 17,372,800) | 20,054,200) | 21,837,400) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 5.52 | 6.18 | 5.86 | 5.03 | 4.77 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Equity turnover = Revenues ÷ Total Express Scripts stockholders’ equity
= 100,064,600 ÷ 18,119,600 = 5.52
2 Click competitor name to see calculations.
Between 2013 and 2017, the efficiency of equity utilization exhibited a non-linear trend, characterized by a period of steady growth followed by a contraction in the final year. This movement was primarily driven by fluctuations in the equity base rather than changes in revenue generation.
- Revenue Performance
- Revenues remained relatively stagnant throughout the analyzed period, starting at approximately $104.1 billion in 2013 and concluding at $100.1 billion in 2017. This marginal decline indicates a plateau in top-line growth, providing a stable but non-expanding numerator for the turnover calculation.
- Stockholders' Equity Trends
- Total stockholders' equity experienced a consistent downward trajectory from 2013 to 2016, falling from $21.8 billion to a low of $16.2 billion. A partial reversal of this trend occurred in 2017, with equity increasing to $18.1 billion.
- Equity Turnover Dynamics
- The equity turnover ratio rose steadily from 4.77 in 2013 to a peak of 6.18 in 2016. Given that revenues were flat or slightly decreasing, this improvement in the ratio was mathematically driven by the contraction of the equity base, indicating a higher proportion of revenue generated per dollar of equity. The ratio subsequently declined to 5.52 in 2017, directly correlating with the increase in stockholders' equity recorded for that period.
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