ON Semiconductor Corp. (NASDAQ:ON)

The analysis of the provided quarterly financial data reveals distinct trends across the three turnover ratios over the observed periods.

Net Fixed Asset Turnover

This ratio shows an overall decreasing trend from the end of 2019 through the first quarter of 2024. Initially, the ratio hovered around 2.1 to 2.9, peaking near 2.92 in the third quarter of 2022. However, since this peak, a steady decline is evident, falling to 1.84 by the first quarter of 2024. This decline suggests a reduction in efficiency in utilizing fixed assets to generate sales over recent quarters.

Total Asset Turnover

The total asset turnover ratio presents a somewhat stable but slightly declining pattern overall. Starting from around 0.65 at the end of 2019, it experienced moderate fluctuations, reaching around 0.73 in late 2022. Post this peak, the ratio has diminished gradually to 0.60 by the first quarter of 2024. The mild decline indicates a slight decrease in the company's effectiveness in generating revenues from its total asset base.

Equity Turnover

Equity turnover exhibits a clear downward trajectory from the end of 2019 through early 2024. From a starting point near 1.67 at the end of 2019, the ratio decreased steadily to 1.41 by the third quarter of 2022 and continued declining to 1.00 by the first quarter of 2024. This consistent drop suggests diminishing returns in terms of revenue generated per unit of equity over time.

Overall, the data indicate declining operational efficiency in asset and equity utilization. While there was a peak in turnover ratios around late 2021 to mid-2022, the subsequent quarters show a downward trend, reflecting potential challenges in maintaining sales relative to asset and equity levels.

The revenue trend demonstrates notable fluctuations over the analyzed periods. Initially, revenue ranged between approximately $1.34 billion and $1.40 billion during 2019, with a decline observed in the first two quarters of 2020, reaching around $1.21 billion. From mid-2020 onwards, a general upward trajectory is evident, peaking at about $2.19 billion in the third quarter of 2022. However, following this peak, revenue declines in subsequent quarters, finishing at approximately $1.86 billion in the first quarter of 2024.

Regarding the net value of property, plant, and equipment (including right-of-use financing lease assets), an overall increasing trend is apparent. Values start near $2.58 billion in early 2019 and show steady increments through 2020 and 2021. A significant increase occurs in late 2022 and early 2023, reaching upward of $4.44 billion. This reflects substantial investments or asset acquisitions during the recent periods.

The net fixed asset turnover ratio, which measures revenue generated per dollar of fixed assets, exhibits variability. Starting at approximately 2.13 in late 2019, the ratio gradually increased, peaking at about 2.92 in late 2022. Subsequently, it declined steadily to a ratio near 1.84 by the first quarter of 2024. This pattern indicates that although asset base expansion occurred, efficiency in using fixed assets to generate revenue decreased in the latest periods.

Revenue

Fluctuated between $1.34 billion and $1.40 billion during 2019, dipped in early 2020 to approximately $1.21 billion, followed by growth peaking at $2.19 billion in Q3 2022, then declining to $1.86 billion by Q1 2024.

Property, Plant and Equipment (net)

Displayed a general upward trend from $2.58 billion in early 2019 to a peak of $4.44 billion in early 2024, suggesting significant capital investments in recent years.

Net Fixed Asset Turnover Ratio

Rose from around 2.13 in late 2019 to a peak of 2.92 in late 2022, then decreased progressively to 1.84 by Q1 2024, indicating reduced asset utilization efficiency in the most recent quarters.

In summary, the data reveals that the company experienced growth in revenue and asset base over the medium term, supported by increased capital expenditures. However, the declining fixed asset turnover in the latest quarters suggests that the recent increase in assets has not yet translated proportionately into revenue growth, highlighting a potential area for operational focus.

The revenue figures exhibit a fluctuating trend over the reported quarters, with periodic ups and downs. Beginning at approximately 1.39 billion US dollars in the first quarter of 2019, revenue showed a gradual decline through mid-2020, reaching a low near 1.21 billion, before entering a phase of sustained growth that peaked around 2.19 billion in the third quarter of 2022. Subsequently, revenue displayed a decreasing pattern, falling to about 1.86 billion by the first quarter of 2024.

Total assets followed a general upward trajectory throughout the period. Starting at roughly 7.56 billion US dollars in the first quarter of 2019, assets increased steadily, surpassing 13.48 billion by the first quarter of 2024. This indicates consistent asset base expansion despite some fluctuations, most notably the dip observed in late 2020 before continuing the upward movement.

Total asset turnover data, available from the fourth quarter of 2019, reveals a decreasing trend from 0.65 through 0.55 in mid-2020, followed by a recovery and a peak of 0.73 in late 2022. Thereafter, the ratio gradually declined to 0.6 by early 2024. This pattern suggests variations in the company's efficiency in generating revenue from assets, with the peak implying improved operational efficiency during late 2021 to 2022, and a subsequent reduction indicating a decline in asset utilization efficiency into 2024.

Revenue

Displayed cyclical fluctuations with a notable decline through early 2020, a strong recovery peaked in late 2022, followed by a downward trend into early 2024.

Total Assets

Showed consistent growth over the entire period, more than doubling from 7.56 billion to 13.48 billion US dollars, despite minor intermittent decreases.

Total Asset Turnover

Initially decreased, then improved significantly before declining again, indicating fluctuations in how effectively the company converted assets into revenue.

The revenue figures demonstrate notable fluctuations over the analyzed periods. From the beginning in March 2019 through the end of 2019, revenue experienced moderate growth, increasing from approximately 1,386 million US dollars to 1,402 million US dollars. However, in 2020, a decline is evident, with revenues dropping to as low as 1,213 million US dollars in the second quarter, potentially reflecting challenges during that period. Subsequently, a recovery and significant growth phase is observed throughout 2021 and early 2022, with revenue peaking at around 2,192 million US dollars in the third quarter of 2022. Thereafter, a decline trend appears, as revenue falls to approximately 1,863 million US dollars by the first quarter of 2024.

Shareholders’ equity shows consistent growth throughout the full span of the data. Starting near 3,198 million US dollars in early 2019, the equity base expands steadily to over 8,123 million US dollars by the first quarter of 2024. This upward trend indicates strengthening financial stability and an increasing equity cushion available to shareholders, highlighting the company’s capacity to finance its operations primarily through equity.

The equity turnover ratio—calculated as revenue divided by average shareholders’ equity—reveals a decreasing pattern over time. At the end of 2019, this metric stood around 1.67, but systematically declined to approximately 1.00 by the first quarter of 2024. This diminishing ratio suggests that although revenue levels show variability and growth in some periods, the increase in equity has outpaced revenue growth, implying a reduction in asset utilization efficiency from an equity turnover standpoint.

Revenue Trends

Experienced moderate growth in 2019, a dip during 2020, followed by robust expansion through 2021 to mid-2022, then a gradual decline towards early 2024.

Stockholders’ Equity

Consistently increased with no interruptions, more than doubling from early 2019 to early 2024, signifying enhanced capitalization.

Equity Turnover Ratio

Declined steadily from about 1.67 to 1.00, indicating a relative slowdown in revenue generation efficiency relative to shareholders’ equity growth.

Overall, the data shows a company that has grown its equity base significantly, while revenue has experienced cycles of decline and growth. The declining equity turnover ratio may warrant further investigation into operational efficiency and the utilization of capital to drive revenue. The sustained increase in equity suggests a strong financial foundation, though optimizing asset utilization remains an area for potential improvement.