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)
Old Dominion Freight Line Inc., long-term (investment) activity ratios
Based on: 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), 10-K (reporting date: 2018-12-31).
The investment activity ratios for the period ending December 31, 2022, exhibit a consistent V-shaped trend characterized by a decline in asset and equity efficiency through 2020, followed by a significant recovery and expansion in 2021 and 2022. By the end of the analyzed period, all efficiency metrics exceeded their 2018 levels, indicating an optimized utilization of the capital base to generate revenue.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio experienced a slight contraction from 1.47 in 2018 to 1.38 in 2019 and 2020. This stagnation was followed by a sharp increase to 1.63 in 2021 and 1.70 in 2022. The inclusion of operating lease right-of-use assets yields a nearly identical trend, moving from 1.47 in 2018 to a low of 1.33 in 2020 before ascending to 1.66 by 2022. The minimal variance between these two metrics suggests that right-of-use assets have a negligible impact on the overall efficiency of fixed asset utilization.
- Total Asset Turnover
- Total asset turnover showed a more pronounced decline in the early part of the period, dropping from 1.14 in 2018 to a period low of 0.92 in 2020. This downward trajectory reversed strongly in the subsequent two years, with the ratio rising to 1.09 in 2021 and reaching a peak of 1.29 in 2022. This indicates a substantial improvement in the company's ability to generate sales from its entire asset base.
- Equity Turnover
- Equity turnover mirrored the general trend of the other activity ratios, decreasing from 1.51 in 2018 to 1.21 in 2020. A robust recovery followed, with the ratio climbing to 1.43 in 2021 and peaking at 1.71 in 2022. The increase in equity turnover suggests an improved efficiency in utilizing shareholder investments to drive top-line growth.
The synchronized recovery across all analyzed ratios indicates that the increase in revenue generation between 2020 and 2022 significantly outpaced the growth of the company's asset and equity bases. The alignment of these trends suggests a systemic improvement in operational efficiency and investment productivity during the final two years of the analyzed period.
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Net Fixed Asset Turnover
Old Dominion Freight Line Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue from operations | 6,260,077) | 5,256,328) | 4,015,129) | 4,109,111) | 4,043,695) | |
| Net property and equipment | 3,687,068) | 3,215,686) | 2,914,031) | 2,968,835) | 2,754,943) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 1.70 | 1.63 | 1.38 | 1.38 | 1.47 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| FedEx Corp. | 2.45 | 2.35 | — | — | — | |
| Uber Technologies Inc. | 15.31 | 9.42 | — | — | — | |
| Union Pacific Corp. | 0.44 | 0.40 | — | — | — | |
| United Airlines Holdings Inc. | 1.31 | 0.77 | — | — | — | |
| United Parcel Service Inc. | 2.89 | 2.91 | — | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Transportation | 1.79 | 1.55 | — | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Industrials | 2.94 | 2.72 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Net fixed asset turnover = Revenue from operations ÷ Net property and equipment
= 6,260,077 ÷ 3,687,068 = 1.70
2 Click competitor name to see calculations.
An examination of the financial results from 2018 to 2022 reveals a period of significant operational expansion and increasing asset efficiency. Revenue from operations experienced a substantial upward trajectory, particularly after 2020, rising from 4.04 billion USD in 2018 to 6.26 billion USD by the end of 2022. During the same interval, the investment in net property and equipment increased from 2.75 billion USD to 3.69 billion USD, indicating a steady expansion of the company's physical infrastructure to support growth.
- Net Fixed Asset Turnover Trend
- The net fixed asset turnover ratio demonstrated a fluctuating but ultimately positive trend. After a slight decline from 1.47 in 2018 to a plateau of 1.38 in 2019 and 2020, the ratio accelerated sharply, reaching 1.63 in 2021 and peaking at 1.70 in 2022.
- Asset Utilization Efficiency
- The increase in the turnover ratio during the 2021-2022 period indicates a marked improvement in how effectively net fixed assets are utilized to generate sales. The transition from 1.38 to 1.70 suggests that the company successfully scaled its revenue streams at a rate that significantly exceeded the growth of its capital investments in property and equipment.
- Operational Correlation
- A comparative analysis shows that while net property and equipment grew by approximately 34% over the five-year period, revenue from operations grew by approximately 55%. This divergence confirms that the rise in the net fixed asset turnover ratio was driven by high revenue growth relative to the pace of asset accumulation, reflecting enhanced productivity of the long-term asset base.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Old Dominion Freight Line Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue from operations | 6,260,077) | 5,256,328) | 4,015,129) | 4,109,111) | 4,043,695) | |
| Net property and equipment | 3,687,068) | 3,215,686) | 2,914,031) | 2,968,835) | 2,754,943) | |
| Operating lease right-of-use assets (presented within Other assets) | 95,200) | 100,300) | 104,400) | 65,300) | —) | |
| Net property and equipment (including operating lease, right-of-use asset) | 3,782,268) | 3,315,986) | 3,018,431) | 3,034,135) | 2,754,943) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 1.66 | 1.59 | 1.33 | 1.35 | 1.47 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| FedEx Corp. | 1.71 | 1.64 | — | — | — | |
| Uber Technologies Inc. | 9.03 | 5.39 | — | — | — | |
| Union Pacific Corp. | 0.43 | 0.38 | — | — | — | |
| United Airlines Holdings Inc. | 1.17 | 0.67 | — | — | — | |
| United Parcel Service Inc. | 2.61 | 2.63 | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Transportation | 1.53 | 1.33 | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Industrials | 2.54 | 2.34 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenue from operations ÷ Net property and equipment (including operating lease, right-of-use asset)
= 6,260,077 ÷ 3,782,268 = 1.66
2 Click competitor name to see calculations.
The analysis of asset utilization efficiency from 2018 to 2022 reveals a period of initial contraction in productivity followed by a strong recovery and a significant improvement in the capacity to generate revenue from fixed assets.
- Revenue Trajectory
- Revenue from operations remained relatively stagnant between 2018 and 2020, oscillating around 4 billion USD. A sharp upward trend began in 2021, with revenue increasing to 5.26 billion USD, and continuing to rise to 6.26 billion USD by the end of 2022.
- Investment in Fixed Assets
- Net property and equipment, inclusive of right-of-use assets, showed a consistent growth pattern over the five-year period. The asset base expanded from 2.75 billion USD in 2018 to 3.78 billion USD in 2022, reflecting a steady commitment to expanding physical and leased infrastructure.
- Net Fixed Asset Turnover Efficiency
- The net fixed asset turnover ratio declined from 1.47 in 2018 to a low of 1.33 in 2020, indicating that the growth in fixed assets during this period slightly outpaced revenue gains. However, a marked reversal occurred in 2021 and 2022, with the ratio climbing to 1.59 and 1.66, respectively. This trajectory demonstrates a significant increase in asset productivity, where the company successfully leveraged its investment base to achieve disproportionately higher revenue growth in the final two years of the analysis.
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Total Asset Turnover
Old Dominion Freight Line Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue from operations | 6,260,077) | 5,256,328) | 4,015,129) | 4,109,111) | 4,043,695) | |
| Total assets | 4,838,610) | 4,821,544) | 4,369,410) | 3,995,568) | 3,545,283) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 1.29 | 1.09 | 0.92 | 1.03 | 1.14 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| FedEx Corp. | 1.09 | 1.01 | — | — | — | |
| Uber Technologies Inc. | 0.99 | 0.45 | — | — | — | |
| Union Pacific Corp. | 0.38 | 0.34 | — | — | — | |
| United Airlines Holdings Inc. | 0.67 | 0.36 | — | — | — | |
| United Parcel Service Inc. | 1.41 | 1.40 | — | — | — | |
| Total Asset Turnover, Sector | ||||||
| Transportation | 0.92 | 0.76 | — | — | — | |
| Total Asset Turnover, Industry | ||||||
| Industrials | 0.66 | 0.58 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Total asset turnover = Revenue from operations ÷ Total assets
= 6,260,077 ÷ 4,838,610 = 1.29
2 Click competitor name to see calculations.
The total asset turnover exhibits a U-shaped trajectory over the five-year period, reflecting an initial period of diminishing efficiency followed by a significant recovery and expansion. Between 2018 and 2020, the turnover ratio declined steadily from 1.14 to a low of 0.92, indicating that the growth in the asset base outpaced the generation of operational revenue during this timeframe.
A sharp reversal is observed beginning in 2021, with the ratio climbing to 1.09 and peaking at 1.29 by the end of 2022. This recovery suggests a marked improvement in asset productivity, as the company generated substantially higher revenue without a proportional increase in its total asset base.
- Revenue Growth Trends
- Operational revenue remained relatively stagnant between 2018 and 2020, fluctuating around 4 billion US$. However, a period of aggressive growth followed, with revenue increasing from 4.02 billion US$ in 2020 to 6.26 billion US$ in 2022, representing a growth of approximately 56% over two years.
- Asset Base Expansion
- Total assets grew consistently from 3.55 billion US$ in 2018 to 4.82 billion US$ in 2021. Notably, asset growth decelerated significantly between 2021 and 2022, increasing by only approximately 17 million US$, while revenue continued to rise sharply.
- Asset Turnover Efficiency
- The efficiency of asset utilization reached its nadir in 2020 at 0.92. The subsequent climb to 1.29 in 2022 demonstrates a high level of operational leverage, where existing assets were utilized more effectively to drive top-line growth.
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Equity Turnover
Old Dominion Freight Line Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue from operations | 6,260,077) | 5,256,328) | 4,015,129) | 4,109,111) | 4,043,695) | |
| Shareholders’ equity | 3,652,917) | 3,679,807) | 3,326,288) | 3,080,717) | 2,680,483) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 1.71 | 1.43 | 1.21 | 1.33 | 1.51 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| FedEx Corp. | 3.75 | 3.47 | — | — | — | |
| Uber Technologies Inc. | 4.34 | 1.21 | — | — | — | |
| Union Pacific Corp. | 2.05 | 1.54 | — | — | — | |
| United Airlines Holdings Inc. | 6.52 | 4.90 | — | — | — | |
| United Parcel Service Inc. | 5.07 | 6.83 | — | — | — | |
| Equity Turnover, Sector | ||||||
| Transportation | 4.16 | 3.40 | — | — | — | |
| Equity Turnover, Industry | ||||||
| Industrials | 3.06 | 2.63 | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Equity turnover = Revenue from operations ÷ Shareholders’ equity
= 6,260,077 ÷ 3,652,917 = 1.71
2 Click competitor name to see calculations.
The equity turnover ratio for the period between 2018 and 2022 demonstrates a cyclical trend, characterized by an initial decline followed by a strong recovery and expansion. This movement reflects the dynamic interplay between the growth of the shareholders' equity base and the acceleration of operational revenue.
- Revenue Performance
- Operational revenue remained relatively stable between 2018 and 2020, fluctuating around the 4 billion US dollar threshold. A significant upward trajectory began in 2021, with revenue increasing to 5.26 billion US dollars and further climbing to 6.26 billion US dollars by 2022, indicating a substantial acceleration in top-line growth.
- Shareholders' Equity Trends
- Equity grew consistently from 2.68 billion US dollars in 2018 to a peak of 3.68 billion US dollars in 2021. A slight reduction was observed in 2022, with equity settling at 3.65 billion US dollars. The steady accumulation of equity during the first four years of the period initially outpaced revenue growth, contributing to a temporary decline in turnover efficiency.
- Equity Turnover Analysis
- The equity turnover ratio experienced a downward trend from 1.51 in 2018 to a minimum of 1.21 in 2020, suggesting a period of decreased efficiency in utilizing equity to generate sales. This trend reversed sharply in 2021 and 2022, with the ratio rising to 1.43 and then to 1.71, respectively. The peak in 2022 indicates that the company achieved its highest level of equity productivity over the five-year period, driven by rapid revenue expansion coupled with a stabilized equity base.
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