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)
Illumina Inc., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibited some fluctuations over the analyzed period. Starting at 3.36 in 2016, it decreased to 2.96 in 2017, followed by a small recovery to 3.10 in 2018. The ratio then increased significantly to 3.99 in 2019 before declining to 3.51 in 2020. This pattern suggests variations in the efficiency with which fixed assets were used to generate sales, with peak efficiency observed in 2019.
- Net Fixed Asset Turnover Including Operating Lease, Right-of-Use Asset
- When including operating lease right-of-use assets, the net fixed asset turnover ratio followed a different trend. It remained steady at 3.36 and 2.96 for 2016 and 2017 respectively, then held at 3.10 in 2018. However, this ratio decreased sharply in 2019 to 2.45 and further declined to 2.23 in 2020. This decline likely reflects the impact of incorporating lease assets, indicating that asset utilization efficiency diminished when considering leased assets.
- Total Asset Turnover
- The total asset turnover ratio showed a consistent downward trend over the five-year period, decreasing from 0.56 in 2016 to 0.43 in 2020. This suggests a gradual decline in the efficiency with which all assets were employed to generate sales revenue, pointing toward either asset growth outpacing sales growth or a reduction in operational efficiency.
- Equity Turnover
- Equity turnover demonstrated a steady decline from 1.09 in 2016 to 0.69 in 2020. This downward trend indicates a decreasing efficiency in using shareholders' equity to produce revenue, which could be attributed to factors like increased equity base without proportional sales growth or other operational challenges impacting revenue generation relative to equity.
Net Fixed Asset Turnover
Illumina Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 29, 2019 | Dec 30, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | 3,239) | 3,543) | 3,333) | 2,752) | 2,398) | |
| Property and equipment, net | 922) | 889) | 1,075) | 931) | 713) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 3.51 | 3.99 | 3.10 | 2.96 | 3.36 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| AbbVie Inc. | 8.73 | — | — | — | — | |
| Amgen Inc. | 4.96 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 7.22 | — | — | — | — | |
| Danaher Corp. | 6.83 | — | — | — | — | |
| Eli Lilly & Co. | 2.83 | — | — | — | — | |
| Gilead Sciences Inc. | 4.90 | — | — | — | — | |
| Johnson & Johnson | 4.40 | — | — | — | — | |
| Merck & Co. Inc. | 2.67 | — | — | — | — | |
| Pfizer Inc. | 3.07 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 2.64 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 5.45 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 6.47 | — | — | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 4.31 | — | — | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Health Care | 8.34 | — | — | — | — | |
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 2020 Calculation
Net fixed asset turnover = Revenue ÷ Property and equipment, net
= 3,239 ÷ 922 = 3.51
2 Click competitor name to see calculations.
- Revenue Trends
-
The revenue shows a consistent upward trend from 2016 to 2019, increasing from 2,398 million US dollars in 2016 to 3,543 million US dollars in 2019. However, there is a decline in 2020, where revenue drops to 3,239 million US dollars, reversing the previous growth trend.
- Property and Equipment, Net
-
The net value of property and equipment exhibits an overall growth from 713 million US dollars in 2016 to a peak at 1,075 million US dollars in 2018. Following this peak, there is a decline to 889 million in 2019, with a slight recovery to 922 million in 2020. This pattern suggests some divestments or asset impairments after 2018, partially offset in the final year.
- Net Fixed Asset Turnover
-
The net fixed asset turnover ratio fluctuates within a moderate range over the period. It decreases from 3.36 in 2016 to 2.96 in 2017, then increases to 3.10 in 2018. A notable jump occurs in 2019 to 3.99, indicating increased efficiency in using fixed assets to generate revenue. In 2020, this ratio declines to 3.51, but remains higher than most previous years except 2019, implying relatively stable asset utilization despite the revenue decline in that year.
- Overall Insights
-
The data indicates growth in both revenue and fixed assets through 2018, followed by a shift with declining or fluctuating asset values and revenue in 2019 and 2020. The net fixed asset turnover ratio's variability may reflect changing operational efficiency or shifts in asset base composition. The decline in revenue and asset values during 2020 could be indicative of external challenges impacting performance, while the maintained asset turnover ratio suggests efforts to sustain operational effectiveness amid these pressures.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Illumina Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 29, 2019 | Dec 30, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | 3,239) | 3,543) | 3,333) | 2,752) | 2,398) | |
| Property and equipment, net | 922) | 889) | 1,075) | 931) | 713) | |
| Operating lease right-of-use assets | 532) | 555) | —) | —) | —) | |
| Property and equipment, net (including operating lease, right-of-use asset) | 1,454) | 1,444) | 1,075) | 931) | 713) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 2.23 | 2.45 | 3.10 | 2.96 | 3.36 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| AbbVie Inc. | 7.46 | — | — | — | — | |
| Amgen Inc. | 4.58 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 6.30 | — | — | — | — | |
| Danaher Corp. | 5.30 | — | — | — | — | |
| Eli Lilly & Co. | 2.63 | — | — | — | — | |
| Gilead Sciences Inc. | 4.34 | — | — | — | — | |
| Johnson & Johnson | 4.18 | — | — | — | — | |
| Merck & Co. Inc. | 2.43 | — | — | — | — | |
| Pfizer Inc. | 2.79 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 2.58 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 4.82 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 4.83 | — | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 3.91 | — | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Health Care | 6.51 | — | — | — | — | |
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 2020 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenue ÷ Property and equipment, net (including operating lease, right-of-use asset)
= 3,239 ÷ 1,454 = 2.23
2 Click competitor name to see calculations.
- Revenue
- Revenue exhibited an overall upward trend from 2016 to 2019, increasing from $2,398 million to a peak of $3,543 million. However, in 2020, revenue declined to $3,239 million, indicating a reduction of approximately 8.6% from the previous year. This suggests that while the company experienced steady growth for several years, it faced challenges or market changes that impacted sales in 2020.
- Property and Equipment, Net (including operating lease, right-of-use asset)
- The net value of property and equipment increased consistently over the period, starting at $713 million in 2016 and rising to $1,454 million by 2020. This more than doubling of investment suggests an ongoing expansion or modernization of the company's asset base. The most significant increases occurred between 2018 and 2019, evidencing accelerated capital expenditure in those years.
- Net Fixed Asset Turnover (including operating lease, right-of-use asset)
- The net fixed asset turnover ratio declined steadily throughout the period, from 3.36 in 2016 to 2.23 in 2020. This decreasing ratio implies that while the company increased its asset base, the efficiency with which these assets generated revenue diminished. The ratio drop from 2019 (2.45) to 2020 (2.23) also reflects the combination of higher asset values alongside the revenue decline in 2020, indicating reduced asset productivity in generating sales.
Total Asset Turnover
Illumina Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 29, 2019 | Dec 30, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | 3,239) | 3,543) | 3,333) | 2,752) | 2,398) | |
| Total assets | 7,585) | 7,316) | 6,959) | 5,257) | 4,281) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.43 | 0.48 | 0.48 | 0.52 | 0.56 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| AbbVie Inc. | 0.30 | — | — | — | — | |
| Amgen Inc. | 0.39 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 0.36 | — | — | — | — | |
| Danaher Corp. | 0.29 | — | — | — | — | |
| Eli Lilly & Co. | 0.53 | — | — | — | — | |
| Gilead Sciences Inc. | 0.36 | — | — | — | — | |
| Johnson & Johnson | 0.47 | — | — | — | — | |
| Merck & Co. Inc. | 0.52 | — | — | — | — | |
| Pfizer Inc. | 0.28 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.50 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.47 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.53 | — | — | — | — | |
| Total Asset Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.39 | — | — | — | — | |
| Total Asset Turnover, Industry | ||||||
| Health Care | 0.64 | — | — | — | — | |
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 2020 Calculation
Total asset turnover = Revenue ÷ Total assets
= 3,239 ÷ 7,585 = 0.43
2 Click competitor name to see calculations.
- Revenue Trends
- Revenue demonstrated a general upward trajectory from 2016 through 2019, increasing from 2,398 million US dollars to a peak of 3,543 million US dollars. However, there was a reversal in 2020 with a decline to 3,239 million US dollars, representing a decrease after several years of growth.
- Total Assets Trends
- Total assets exhibited consistent growth over the entire period. Starting at 4,281 million US dollars in 2016, assets expanded steadily each year, reaching 7,585 million US dollars by the end of 2020. This reflects a continuous investment or accumulation of resources.
- Total Asset Turnover Trends
- The total asset turnover ratio declined gradually over the five-year period. The ratio decreased from 0.56 in 2016 to 0.43 in 2020, indicating a diminishing efficiency in generating revenue from the existing asset base despite the growth in total assets. This trend suggests that asset growth outpaced revenue growth, reducing asset utilization effectiveness.
- Overall Observations
- While revenue increased notably through 2019 before declining in 2020, total assets expanded uninterruptedly, leading to a consistent decrease in asset turnover. This pattern highlights a potential area of concern regarding asset utilization efficiency, particularly in the context of the revenue decline observed in the final year analyzed.
Equity Turnover
Illumina Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 29, 2019 | Dec 30, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | 3,239) | 3,543) | 3,333) | 2,752) | 2,398) | |
| Total Illumina stockholders’ equity | 4,694) | 4,613) | 3,758) | 2,749) | 2,197) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 0.69 | 0.77 | 0.89 | 1.00 | 1.09 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| AbbVie Inc. | 3.50 | — | — | — | — | |
| Amgen Inc. | 2.58 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 1.12 | — | — | — | — | |
| Danaher Corp. | 0.56 | — | — | — | — | |
| Eli Lilly & Co. | 4.35 | — | — | — | — | |
| Gilead Sciences Inc. | 1.34 | — | — | — | — | |
| Johnson & Johnson | 1.31 | — | — | — | — | |
| Merck & Co. Inc. | 1.90 | — | — | — | — | |
| Pfizer Inc. | 0.67 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.77 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.93 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.71 | — | — | — | — | |
| Equity Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 1.22 | — | — | — | — | |
| Equity Turnover, Industry | ||||||
| Health Care | 1.89 | — | — | — | — | |
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
1 2020 Calculation
Equity turnover = Revenue ÷ Total Illumina stockholders’ equity
= 3,239 ÷ 4,694 = 0.69
2 Click competitor name to see calculations.
The financial data shows several key trends over the five-year period ending in 2020. Revenue experienced a general upward trajectory from 2016 through 2019. Beginning at $2,398 million in 2016, it increased annually to a peak of $3,543 million in 2019, representing a significant growth of approximately 48% over the three-year span. However, in 2020, revenue declined to $3,239 million, indicating a slight reversal of the prior growth trend.
Shareholders’ equity exhibited steady growth throughout the period, rising from $2,197 million in 2016 to $4,694 million in 2020. This increase reflects a more than doubling of equity over five years, suggesting consistent retention of earnings or capital infusion.
The equity turnover ratio, which measures revenue generated per dollar of shareholders’ equity, demonstrated a declining trend. Starting at 1.09 in 2016, it decreased each year to 0.69 by 2020. This indicates that although the company’s equity base expanded substantially, revenue growth did not keep pace. The declining ratio signals reduced efficiency in utilizing equity to generate revenue. The decline in revenue in 2020 contributed to the continued fall in this ratio.
In summary, while the company grew its equity base steadily, revenue growth plateaued in 2019 and declined in 2020, resulting in decreasing equity turnover. This suggests a moderation in operational efficiency or a shift in business conditions during the final year presented.