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)
Monster Beverage Corp., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The analysis of long-term activity ratios reveals a divergent trend between fixed asset utilization and overall asset and equity efficiency. While total asset and equity turnover remained relatively stable, there was a significant contraction in the efficiency of net fixed assets during the latter half of the observed period.
- Net Fixed Asset Turnover
- A period of volatility is observed in the utilization of fixed assets. The net fixed asset turnover increased from 14.07 in 2019 to a peak of 17.66 in 2021. However, this was followed by a sharp decline, falling to 12.21 in 2022 and further to 8.02 in 2023. A nearly identical pattern is evident when including operating lease right-of-use assets, which peaked at 16.45 in 2021 before dropping to 7.52 by the end of 2023. This suggests a substantial increase in the fixed asset base relative to revenue generation in recent years.
- Total Asset Turnover
- The total asset turnover ratio demonstrates relative stability with a slight downward bias. Starting at 0.82 in 2019, the ratio fluctuated minimally, reaching a low of 0.71 in 2021 before recovering slightly to 0.74 by 2023. This indicates that the overall efficiency of the company's total asset base in generating sales has remained consistent over the five-year period.
- Equity Turnover
- Equity turnover experienced a decline from 1.01 in 2019 to 0.87 in 2023. After an initial drop to 0.89 in 2020 and 0.84 in 2021, the ratio showed a slight recovery to 0.90 in 2022 before settling at 0.87. This downward trend suggests a moderate decrease in the efficiency with which shareholders' equity is being utilized to produce revenue.
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Net Fixed Asset Turnover
Monster Beverage Corp., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | 7,140,027) | 6,311,050) | 5,541,352) | 4,598,638) | 4,200,819) | |
| Property and equipment, net | 890,796) | 516,897) | 313,753) | 314,656) | 298,640) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 8.02 | 12.21 | 17.66 | 14.61 | 14.07 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Coca-Cola Co. | 4.95 | 4.37 | 3.90 | — | — | |
| Mondelēz International Inc. | 3.72 | 3.49 | 3.32 | — | — | |
| PepsiCo Inc. | 3.38 | 3.56 | 3.55 | — | — | |
| Philip Morris International Inc. | 4.68 | 4.73 | 5.09 | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Food, Beverage & Tobacco | 3.90 | 3.86 | 3.78 | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Consumer Staples | 5.17 | 5.21 | 5.06 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net fixed asset turnover = Net sales ÷ Property and equipment, net
= 7,140,027 ÷ 890,796 = 8.02
2 Click competitor name to see calculations.
An analysis of long-term activity reveals a period of significant expansion in fixed assets occurring alongside consistent revenue growth. While net sales increased steadily from 2019 through 2023, the rate of investment in property and equipment accelerated sharply in the final two years of the period, impacting overall asset efficiency.
- Net Sales Trajectory
- Revenue exhibited a continuous upward trend, increasing from 4,200,819 thousand USD in 2019 to 7,140,027 thousand USD by the end of 2023. This steady growth indicates a consistent expansion of top-line performance over the five-year period.
- Fixed Asset Investment Patterns
- Property and equipment, net, remained relatively stable between 2019 and 2021, with values fluctuating slightly around 300 million USD. A significant shift occurred in 2022, where net fixed assets rose to 516,897 thousand USD, followed by a substantial increase to 890,796 thousand USD in 2023. This suggests a period of aggressive capital expenditure and infrastructure investment.
- Net Fixed Asset Turnover Efficiency
- The net fixed asset turnover ratio initially improved, peaking at 17.66 in 2021, which indicates a high level of efficiency in generating sales from the existing asset base. However, the ratio declined sharply to 12.21 in 2022 and further to 8.02 in 2023. This downward trend demonstrates that the growth in fixed assets has outpaced the growth in net sales, leading to a reduction in the productivity of each dollar invested in long-term assets.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Monster Beverage Corp., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | 7,140,027) | 6,311,050) | 5,541,352) | 4,598,638) | 4,200,819) | |
| Property and equipment, net | 890,796) | 516,897) | 313,753) | 314,656) | 298,640) | |
| Right-of-use assets for operating leases (included in Other assets) | 58,845) | 38,012) | 23,157) | 22,754) | 31,342) | |
| Property and equipment, net (including operating lease, right-of-use asset) | 949,641) | 554,909) | 336,910) | 337,410) | 329,982) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 7.52 | 11.37 | 16.45 | 13.63 | 12.73 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Coca-Cola Co. | 4.33 | 3.82 | 3.41 | — | — | |
| Mondelēz International Inc. | 3.47 | 3.25 | 3.10 | — | — | |
| PepsiCo Inc. | 3.05 | 3.24 | 3.25 | — | — | |
| Philip Morris International Inc. | 4.32 | 4.35 | 4.69 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Food, Beverage & Tobacco | 3.53 | 3.51 | 3.45 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Consumer Staples | 4.68 | 4.69 | 4.55 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Net sales ÷ Property and equipment, net (including operating lease, right-of-use asset)
= 7,140,027 ÷ 949,641 = 7.52
2 Click competitor name to see calculations.
An analysis of the long-term investment activity reveals a significant shift in the relationship between revenue generation and fixed asset utilization between 2019 and 2023. While net sales exhibited consistent year-over-year growth, the net fixed asset turnover ratio experienced a peak followed by a sharp decline, driven by a substantial increase in the company's asset base.
- Revenue Growth Trend
- Net sales demonstrated a steady upward trajectory over the five-year period, increasing from 4,200,819 thousand US dollars in 2019 to 7,140,027 thousand US dollars in 2023. This represents a consistent expansion of the top line, providing a stable foundation for operational scaling.
- Fixed Asset Investment Patterns
- Property and equipment, including operating lease right-of-use assets, remained relatively stagnant between 2019 and 2021, hovering around 330,000 to 337,000 thousand US dollars. However, a period of rapid capital expansion began in 2022, with assets rising to 554,909 thousand US dollars, and accelerating further in 2023 to reach 949,641 thousand US dollars. This indicates a strategic pivot toward significant investment in infrastructure or leased assets.
- Net Fixed Asset Turnover Analysis
- The net fixed asset turnover ratio initially improved, rising from 12.73 in 2019 to a peak of 16.45 in 2021. This improvement was the result of increasing sales against a nearly constant asset base, indicating high efficiency in asset utilization. Conversely, from 2022 onward, the ratio declined sharply to 11.37 and then to 7.52 in 2023. This downward trend is a direct consequence of the asset base growing at a rate that far exceeded the growth rate of net sales.
The divergence between sales growth and asset accumulation suggests a transition from an asset-light operational phase to one characterized by heavy investment. While the company continues to scale its revenue, the current reduction in the turnover ratio reflects the lag time between the deployment of new fixed assets and the realization of the corresponding revenue they are intended to generate.
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Total Asset Turnover
Monster Beverage Corp., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | 7,140,027) | 6,311,050) | 5,541,352) | 4,598,638) | 4,200,819) | |
| Total assets | 9,686,522) | 8,293,105) | 7,804,784) | 6,202,716) | 5,150,352) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.74 | 0.76 | 0.71 | 0.74 | 0.82 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Coca-Cola Co. | 0.47 | 0.46 | 0.41 | — | — | |
| Mondelēz International Inc. | 0.50 | 0.44 | 0.43 | — | — | |
| PepsiCo Inc. | 0.91 | 0.94 | 0.86 | — | — | |
| Philip Morris International Inc. | 0.54 | 0.51 | 0.76 | — | — | |
| Total Asset Turnover, Sector | ||||||
| Food, Beverage & Tobacco | 0.62 | 0.61 | 0.60 | — | — | |
| Total Asset Turnover, Industry | ||||||
| Consumer Staples | 1.51 | 1.47 | 1.41 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Total asset turnover = Net sales ÷ Total assets
= 7,140,027 ÷ 9,686,522 = 0.74
2 Click competitor name to see calculations.
Between 2019 and 2023, a consistent upward trajectory is observed in both net sales and total assets. Net sales grew from 4,200,819 thousand US$ to 7,140,027 thousand US$, reflecting strong and steady revenue growth. During the same period, total assets expanded from 5,150,352 thousand US$ to 9,686,522 thousand US$, indicating a significant increase in the company's investment in its asset base.
- Total Asset Turnover Trend
- The total asset turnover ratio exhibits an overall decline from 0.82 in 2019 to 0.74 in 2023. A notable downward trend occurred between 2019 and 2021, with the ratio reaching a minimum of 0.71, which suggests that the growth of the asset base outpaced the growth of net sales during this timeframe.
- Operational Efficiency and Stabilization
- Following the low point in 2021, a recovery to 0.76 was observed in 2022, followed by a slight contraction to 0.74 in 2023. These fluctuations indicate a period of stabilization in asset utilization efficiency after the initial decline.
- Analysis of Resource Utilization
- The discrepancy between the rapid expansion of total assets and the growth rate of net sales has resulted in a lower turnover ratio compared to 2019 levels. This pattern indicates that the company is generating less revenue per unit of asset invested than it did at the start of the five-year period, highlighting a decrease in the overall efficiency of long-term investment activity.
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Equity Turnover
Monster Beverage Corp., equity turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | 7,140,027) | 6,311,050) | 5,541,352) | 4,598,638) | 4,200,819) | |
| Stockholders’ equity | 8,228,744) | 7,025,041) | 6,566,951) | 5,160,860) | 4,171,281) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 0.87 | 0.90 | 0.84 | 0.89 | 1.01 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Coca-Cola Co. | 1.76 | 1.78 | 1.68 | — | — | |
| Mondelēz International Inc. | 1.27 | 1.17 | 1.02 | — | — | |
| PepsiCo Inc. | 4.94 | 5.04 | 4.95 | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
| Equity Turnover, Sector | ||||||
| Food, Beverage & Tobacco | 3.39 | 3.26 | 3.12 | — | — | |
| Equity Turnover, Industry | ||||||
| Consumer Staples | 5.62 | 5.26 | 5.06 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Equity turnover = Net sales ÷ Stockholders’ equity
= 7,140,027 ÷ 8,228,744 = 0.87
2 Click competitor name to see calculations.
Between 2019 and 2023, there was a consistent upward trajectory in both net sales and stockholders' equity, indicating significant expansion in scale. While revenue grew steadily, the growth in the equity base occurred at a rate that influenced the overall efficiency of capital utilization as measured by equity turnover.
- Net Sales Performance
- Net sales experienced uninterrupted annual growth, increasing from 4,200,819 thousand US dollars in 2019 to 7,140,027 thousand US dollars by 2023. This progression demonstrates a strong and sustained increase in revenue generation over the five-year period.
- Stockholders' Equity Expansion
- Stockholders' equity grew substantially from 4,171,281 thousand US dollars in 2019 to 8,228,744 thousand US dollars in 2023. The equity base nearly doubled during this timeframe, reflecting a significant accumulation of capital.
- Equity Turnover Dynamics
- The equity turnover ratio shifted from 1.01 in 2019 to 0.87 in 2023. A notable decline occurred between 2019 and 2021, where the ratio dropped to 0.84, followed by a slight recovery to 0.90 in 2022 and a subsequent dip to 0.87 in 2023. This overall downward trend indicates that the growth of the equity base has outpaced the growth of net sales, resulting in a decrease in the efficiency with which the company generates revenue from its equity investment.
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