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.
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- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Analysis of Solvency Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Price to Operating Profit (P/OP) since 2005
- Analysis of Debt
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Long-term Activity Ratios (Summary)
Monster Beverage Corp., long-term (investment) activity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
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).
- Net fixed asset turnover
- The net fixed asset turnover ratio showed an upward trend from 2019 to 2021, increasing from 14.07 to a peak of 17.66. This indicates an improvement in the efficiency with which the fixed assets were used to generate sales during this period. However, the ratio declined significantly from 2021 to 2023, falling to 8.02, suggesting a reduction in asset utilization efficiency in recent years.
- Net fixed asset turnover (including operating lease, right-of-use asset)
- This ratio mirrors the trend seen in net fixed asset turnover, starting at 12.73 in 2019 and rising to 16.45 in 2021. Subsequent declines brought the ratio down to 7.52 by 2023. The overall pattern confirms a similar efficiency trajectory when considering the additional right-of-use assets from operating leases, emphasizing decreased efficiency since 2021.
- Total asset turnover
- Total asset turnover exhibited a declining trend from 2019 through 2021, dropping from 0.82 to 0.71. There was a slight recovery in 2022 to 0.76, followed by a minor decrease to 0.74 in 2023. This pattern indicates a moderate reduction in the overall efficiency of total asset use to generate sales, with some stabilization after 2021.
- Equity turnover
- Equity turnover declined steadily from 1.01 in 2019 to 0.84 in 2021, implying decreased effectiveness in utilizing equity to generate revenues. This ratio recovered slightly to 0.90 in 2022 but experienced a slight reduction to 0.87 in 2023. The overall trend suggests some recovery in leveraging equity, but not to previous levels.
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 | ||||||
| Property and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Consumer Staples | ||||||
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
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales consistently increased over the five-year period from 2019 to 2023. Starting at approximately 4.2 billion US dollars in 2019, net sales rose steadily each year, reaching over 7.1 billion US dollars by 2023. This reflects a robust upward trend in revenue generation, with the largest year-over-year increments occurring between 2020 and 2023.
- Property and Equipment, Net
- The net value of property and equipment showed a moderate increase from 2019 through 2021, hovering around 298 to 314 million US dollars. A significant jump occurred in 2022, with net property and equipment rising sharply to over 516 million US dollars, followed by further substantial growth in 2023 to nearly 891 million US dollars. This indicates a sizable investment in fixed assets in the most recent two years.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibits notable volatility over the reported period. Initially, the ratio increased from 14.07 in 2019 to a peak of 17.66 in 2021, suggesting improved efficiency in using fixed assets to generate sales. However, from 2021 onwards, this ratio declined considerably, dropping to 8.02 by 2023. This decline coincides with the sharp increase in property and equipment, indicating that asset expansion outpaced growth in net sales and reduced asset utilization efficiency.
- Overall Insights
- Overall, the financial data portray a pattern of strong sales growth accompanied by significant investment in fixed assets in recent years. While the company successfully grew its revenues, the declining net fixed asset turnover highlights a potential challenge in maintaining asset efficiency. The substantial increase in property and equipment suggests strategic capital expenditures, which have yet to fully translate into proportional sales gains relative to asset size. Monitoring future trends will be essential to assess how these investments impact operational performance.
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 | ||||||
| Property and equipment, net | ||||||
| Right-of-use assets for operating leases (included in Other assets) | ||||||
| Property and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Consumer Staples | ||||||
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)
= ÷ =
2 Click competitor name to see calculations.
The analysis of the provided financial data reveals several notable trends over the five-year period ending December 31, 2023.
- Net Sales
- There was a consistent upward trajectory in net sales, increasing from approximately $4.2 billion in 2019 to over $7.1 billion in 2023. This demonstrates steady revenue growth year over year, with particularly strong increases in 2021 and continuing through 2023.
- Property and Equipment, Net
- The net value of property and equipment, including operating lease right-of-use assets, remained relatively stable between 2019 and 2021, hovering around $330 million. However, starting in 2022, a significant increase occurred, reaching approximately $555 million, and then sharply rising to nearly $950 million in 2023. This suggests substantial investment in fixed assets or capitalization of leased assets during the last two years.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- This efficiency ratio, which relates net sales to net fixed assets, exhibited fluctuating behavior across the period. Initially, it rose from 12.73 in 2019 to a peak of 16.45 in 2021, indicating improved utilization of fixed assets in generating sales. However, a decline followed, with the ratio dropping to 11.37 in 2022 and further to 7.52 in 2023. This downward trend corresponds with the sharp increase in property and equipment, suggesting that asset growth outpaced revenue growth in recent years, possibly due to new investments that have yet to fully translate into proportional sales.
Total Asset Turnover
Monster Beverage Corp., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
| Total Asset Turnover, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| Total Asset Turnover, Industry | ||||||
| Consumer Staples | ||||||
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
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales exhibited a consistent upward trajectory over the five-year period. Beginning at approximately $4.2 billion in 2019, sales increased annually to reach around $7.14 billion by the end of 2023. This represents a substantial growth, indicating successful expansion and increased market demand.
- Total Assets
- Total assets also showed a steady increase from about $5.15 billion in 2019 to nearly $9.69 billion in 2023. This growth suggests ongoing investment in assets, potentially to support expanding operations and the increasing sales volume observed in the same timeframe.
- Total Asset Turnover Ratio
- The total asset turnover ratio fluctuated slightly but remained within a narrow range between 0.71 and 0.82. It started at 0.82 in 2019, decreased to its lowest point of 0.71 in 2021, then recovered moderately to 0.74 in 2023. This indicates that while the company’s efficiency in using assets to generate sales declined somewhat during the middle of the period, it stabilized towards the end, maintaining a consistent capacity to generate sales relative to its asset base.
- Summary of Financial Trends
- The data reflects significant growth in both sales and asset base, underlining an expanding business scale. The total asset turnover ratio's slight decline amidst rising assets and sales suggests that asset growth somewhat outpaced sales growth during certain years. However, the ratio's partial recovery implies improving asset utilization efficiency more recently. Overall, the trends suggest effective scaling with a focus on asset investment, balanced by relatively stable asset use efficiency over time.
Equity Turnover
Monster Beverage Corp., equity turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | ||||||
| Stockholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
| Equity Turnover, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| Equity Turnover, Industry | ||||||
| Consumer Staples | ||||||
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
= ÷ =
2 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals consistent growth in net sales and stockholders’ equity, alongside fluctuations in the equity turnover ratio.
- Net Sales
- Net sales exhibited a steady upward trajectory, increasing from approximately 4.2 billion US dollars in 2019 to over 7.1 billion US dollars by the end of 2023. This growth reflects a compound increase, indicating strong revenue expansion across the evaluated periods.
- Stockholders’ Equity
- Stockholders’ equity showed a significant rise as well, growing from about 4.17 billion US dollars in 2019 to nearly 8.23 billion US dollars in 2023. The equity expansion suggests successful retention of earnings and/or capital injections, contributing to a strengthening of the company’s financial base over time.
- Equity Turnover Ratio
- The equity turnover ratio, which measures the efficiency of the company in generating sales from its equity, exhibited slight variability during the period. It started at 1.01 in 2019, declined to its lowest point of 0.84 in 2021, and then modestly recovered to 0.9 in 2022 before dipping again to 0.87 in 2023. This trend indicates a less efficient use of equity to generate sales in comparison to 2019, despite increasing equity and sales figures.
In summary, while the company has demonstrated robust growth in both revenue and equity, the decreasing equity turnover ratio suggests a gradual reduction in the efficiency with which equity is being utilized to produce sales. This may warrant further examination of operational and capital management strategies to optimize asset utilization.