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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- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
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Long-term Activity Ratios (Summary)
ON Semiconductor 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 demonstrates variability over the analyzed periods. It starts at 2.13 in 2019, dipping slightly to 2.09 in 2020, before increasing to a peak of 2.65 in 2021. Following this peak, the ratio declines to 2.38 in 2022 and further decreases to 1.86 in 2023. This pattern suggests an initial improvement in the efficiency of fixed assets in generating revenue, followed by a significant reduction in the most recent years.
- Net Fixed Asset Turnover Including Operating Lease, Right-of-Use Asset
- This adjusted ratio mirrors the trend of the net fixed asset turnover but is consistently slightly lower. Beginning at 2.04 in 2019, it decreases to 1.98 in 2020, rises to 2.48 in 2021, then declines to 2.22 in 2022, and further to 1.76 in 2023. The similarity in pattern indicates that the impact of operating leases and right-of-use assets on turnover efficiency follows the same directional changes.
- Total Asset Turnover
- The total asset turnover ratio reveals a relatively stable trend with minor fluctuations. The ratio is 0.65 in 2019, decreases to 0.61 in 2020, rebounds to 0.7 in both 2021 and 2022, and then falls back to 0.62 in 2023. This indicates that the overall asset utilization in generating sales has remained fairly consistent, with a slight improvement during 2021-2022, but a subsequent decline in the latest year.
- Equity Turnover
- The equity turnover ratio shows a consistent downward trend over the five-year period. Starting at 1.67 in 2019, it decreases to 1.49 in 2020, 1.47 in 2021, continues dropping to 1.35 in 2022, and reaches 1.06 in 2023. This steady decline suggests a gradually decreasing efficiency in using shareholders' equity to generate revenue.
Net Fixed Asset Turnover
ON Semiconductor 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) | ||||||
| Revenue | ||||||
| Property, plant and equipment and ROU financing lease assets, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| Monolithic Power Systems Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Information Technology | ||||||
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 = Revenue ÷ Property, plant and equipment and ROU financing lease assets, net
= ÷ =
2 Click competitor name to see calculations.
- Revenue Trends
- The revenue experienced a decline from 5,517,900 thousand USD in 2019 to 5,255,000 thousand USD in 2020. Subsequently, there was a significant recovery and growth in 2021 and 2022, reaching a peak of 8,326,200 thousand USD in 2022. However, in 2023, revenue slightly decreased to 8,253,000 thousand USD, indicating a minor pullback after two years of strong growth.
- Property, Plant and Equipment and ROU Financing Lease Assets
- There is a consistent upward trend in the net value of property, plant and equipment, and ROU financing lease assets over the five-year period. The amount increased gradually from 2,591,600 thousand USD in 2019 to 2,516,300 thousand USD in 2020, then rose steadily to 2,546,600 thousand USD in 2021. Notably, a sharper increase occurred in 2022 reaching 3,496,500 thousand USD and continued further to 4,443,900 thousand USD by the end of 2023. This indicates substantial investment or capital expenditure activities in recent years.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio shows variability across the analyzed years. Initially, it slightly decreased from 2.13 in 2019 to 2.09 in 2020. It improved significantly in 2021 to 2.65, reflecting enhanced efficiency in using fixed assets to generate revenue. However, the ratio declined to 2.38 in 2022 and further dropped to 1.86 in 2023. The downward trend in the last two years suggests that the asset base has grown faster than revenue, resulting in reduced efficiency or utilization of net fixed assets.
- Overall Insights
- The financial data reveals that while revenue experienced substantial growth after 2020, increasing investments in fixed assets have outpaced revenue growth in the most recent years. The declining net fixed asset turnover ratio indicates a potential challenge in converting asset investments into proportional revenue gains. The company may need to focus on improving asset utilization or evaluate the returns from recent capital expenditures to enhance operational efficiency.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
ON Semiconductor 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) | ||||||
| Revenue | ||||||
| Property, plant and equipment and ROU financing lease assets, net | ||||||
| Operating ROU assets (included in Other assets) | ||||||
| Property, plant and equipment and ROU financing lease assets, 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 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| Monolithic Power Systems Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Information Technology | ||||||
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) = Revenue ÷ Property, plant and equipment and ROU financing lease assets, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
- Revenue Trends
- Revenue experienced a decline from 5,517,900 thousand USD in 2019 to 5,255,000 thousand USD in 2020. Subsequently, there was a significant increase to 6,739,800 thousand USD in 2021, followed by continued growth to 8,326,200 thousand USD in 2022. However, in 2023, revenue slightly decreased to 8,253,000 thousand USD, indicating a minor contraction after two years of robust growth.
- Property, Plant and Equipment and ROU Financing Lease Assets
- The net value of property, plant and equipment including operating lease right-of-use assets showed a consistent upward trend throughout the period. Starting at 2,701,800 thousand USD in 2019, this asset base remained relatively stable in 2020 and 2021, with values around 2,648,600 and 2,716,700 thousand USD, respectively. However, there was a marked increase in 2022 to 3,758,600 thousand USD, which further rose significantly to 4,691,200 thousand USD in 2023, reflecting substantial investment or capital expenditure in fixed assets.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio started at 2.04 in 2019 and slightly declined to 1.98 in 2020. It then improved markedly to 2.48 in 2021, indicating more efficient use of fixed assets relative to revenue generation. This efficiency diminished to 2.22 in 2022 and dropped further to 1.76 in 2023. The decline in turnover in the last two years suggests that asset growth outpaced revenue growth, potentially implying lowered asset utilization efficiency or lagging returns on increased fixed asset investments.
- Overall Analysis
- The company’s revenue displayed a characteristic dip in 2020 likely due to external factors but demonstrated strong recovery and growth in 2021 and 2022. Despite the revenue growth, the significant increase in property, plant, and equipment assets in 2022 and 2023 was not matched proportionally by revenue increases, which contributed to falling net fixed asset turnover ratios in those years. This indicates that while the company expanded its asset base, its ability to efficiently generate revenue from these assets has weakened. Monitoring future periods will be important to assess if asset utilization improves as investments mature or if operational efficiency challenges persist.
Total Asset Turnover
ON Semiconductor 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) | ||||||
| Revenue | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| Monolithic Power Systems Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Total Asset Turnover, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Total Asset Turnover, Industry | ||||||
| Information Technology | ||||||
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 = Revenue ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Revenue Trends
- Over the five-year period, revenue exhibited a fluctuating yet generally positive trend. Starting at approximately 5.52 billion USD at the end of 2019, there was a slight decline to 5.26 billion USD in 2020. This was followed by a substantial increase to 6.74 billion USD in 2021 and a further rise to 8.33 billion USD in 2022. However, in 2023, revenue experienced a minor decrease to 8.25 billion USD. Overall, the revenue demonstrated resilience and growth, particularly notable in the years 2021 and 2022.
- Total Assets Trends
- Total assets showed a consistent and robust increase throughout the five years under review. Beginning at approximately 8.43 billion USD in 2019, total assets increased steadily each year, reaching 8.67 billion USD in 2020, 9.63 billion USD in 2021, 11.98 billion USD in 2022, and culminating at 13.22 billion USD by the end of 2023. This continuous growth indicates ongoing asset accumulation and possibly expansion efforts.
- Total Asset Turnover Analysis
- The total asset turnover ratio, which measures the efficiency of asset use to generate revenue, showed variability across the period. It started at 0.65 in 2019, dropped slightly to 0.61 in 2020, then improved to 0.70 in both 2021 and 2022. However, the ratio decreased again to 0.62 in 2023. Despite fluctuations, the ratio remained within a moderate range, suggesting that while asset utilization improved in the middle years, it weakened somewhat by the end of the period.
- Overall Observations
- The data reveals a pattern of growth in total assets parallel to an overall increase in revenue, albeit with some short-term decreases. The total asset turnover indicates that efficiency in utilizing assets to produce revenue improved notably during 2021 and 2022 but declined slightly in the latest period. The combination of rising total assets with slightly fluctuating turnover ratios points to significant investments or asset acquisitions with a need to monitor how effectively these assets contribute to revenue generation in the future.
Equity Turnover
ON Semiconductor 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) | ||||||
| Revenue | ||||||
| Total ON Semiconductor Corporation stockholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| Monolithic Power Systems Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Equity Turnover, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Equity Turnover, Industry | ||||||
| Information Technology | ||||||
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 = Revenue ÷ Total ON Semiconductor Corporation stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Revenue Trends
- The revenue exhibited variability over the five-year period. From 2019 to 2020, there was a decrease from approximately $5.52 billion to $5.26 billion, indicating a downturn in sales or operational performance during that year. However, revenue rebounded in 2021, rising significantly to about $6.74 billion, followed by continued growth in 2022, reaching approximately $8.33 billion. In 2023, revenue slightly declined to $8.25 billion but remained substantially higher than the levels seen in 2019 and 2020.
- Stockholders’ Equity Trends
- The total stockholders’ equity showed a consistent upward trajectory across all periods. Starting from about $3.30 billion at the end of 2019, equity increased steadily each year, reaching approximately $3.54 billion in 2020, $4.59 billion in 2021, $6.19 billion in 2022, and $7.78 billion in 2023. This suggests the company has been successful in retaining earnings, raising capital, or otherwise strengthening its financial position over time.
- Equity Turnover Ratio Analysis
- The equity turnover ratio, which measures the efficiency of using shareholders’ equity to generate revenue, exhibited a declining trend over the period. Beginning at 1.67 in 2019, it decreased to 1.49 in 2020 and remained relatively stable at 1.47 in 2021. Subsequently, it declined further to 1.35 in 2022 and reached a low of 1.06 in 2023. This indicates that while the company’s equity base has grown substantially, the rate at which revenue is generated per unit of equity has declined, potentially pointing to diminishing operational efficiency relative to equity or a shift in capital structure.
- Summary of Insights
- Overall, the data reflects a company experiencing significant equity growth alongside fluctuations and overall increases in revenue. The drop in revenue in 2020 was followed by a strong recovery, peaking in 2022. However, the slight revenue decline in 2023 after the peak may warrant attention. The decreasing equity turnover ratio highlights a trend where the asset base outpaces revenue growth, suggesting management may need to focus on improving asset utilization or consider the implications of the expanding equity on returns. The trends in stockholders’ equity indicate a strengthening financial foundation, but the reduction in turnover ratio suggests efficiency metrics should be monitored carefully.