Stock Analysis on Net

Palo Alto Networks Inc. (NASDAQ:PANW)

Analysis of Property, Plant and Equipment

Microsoft Excel

Property, Plant and Equipment Disclosure

Palo Alto Networks Inc., balance sheet: property, plant and equipment

US$ in thousands

Microsoft Excel
Jul 31, 2023 Jul 31, 2022 Jul 31, 2021 Jul 31, 2020 Jul 31, 2019 Jul 31, 2018
Computers, equipment, and software 432,900 404,300 352,100 306,800 264,100 217,900
Leasehold improvements 268,900 249,300 231,600 229,500 204,800 159,500
Land 87,200 87,200 49,600 49,600
Demonstration units 46,900 41,600 43,800 43,300 40,700 33,000
Furniture and fixtures 46,900 45,100 40,300 39,900 30,600 24,600
Property and equipment, gross 882,800 827,500 717,400 669,100 540,200 435,000
Accumulated depreciation (528,300) (469,700) (399,000) (321,000) (244,200) (161,900)
Property and equipment, net 354,500 357,800 318,400 348,100 296,000 273,100

Based on: 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31).

Item Description The company
Property and equipment, gross Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Palo Alto Networks Inc. property and equipment, gross increased from 2021 to 2022 and from 2022 to 2023.
Property and equipment, net Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Palo Alto Networks Inc. property and equipment, net increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Asset Age Ratios (Summary)

Palo Alto Networks Inc., asset age ratios

Microsoft Excel
Jul 31, 2023 Jul 31, 2022 Jul 31, 2021 Jul 31, 2020 Jul 31, 2019 Jul 31, 2018
Average age ratio 66.40% 63.45% 59.75% 51.82% 45.21% 37.22%
Estimated total useful life (years) 8 8 7 6 6 6
Estimated age, time elapsed since purchase (years) 6 5 4 3 3 2
Estimated remaining life (years) 3 3 3 3 3 4

Based on: 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31).

Asset age ratio Description The company
Average age ratio As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company fixed asset base is old or new. Newer assets are likely to be more efficient. Palo Alto Networks Inc. average age ratio of depreciable property, plant and equipment deteriorated from 2021 to 2022 and from 2022 to 2023.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company depreciation policy and can be used for comparisons with competitors. Palo Alto Networks Inc. estimated total useful life of depreciable property, plant and equipment increased from 2021 to 2022 and from 2022 to 2023.
Estimated time elapsed since purchase The approximate age in years of a company fixed assets. Useful for comparison purposes. Palo Alto Networks Inc. estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2021 to 2022 and from 2022 to 2023.
Estimated remaining life Palo Alto Networks Inc. estimated remaining life of depreciable property, plant and equipment increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Average Age

Microsoft Excel
Jul 31, 2023 Jul 31, 2022 Jul 31, 2021 Jul 31, 2020 Jul 31, 2019 Jul 31, 2018
Selected Financial Data (US$ in thousands)
Accumulated depreciation 528,300 469,700 399,000 321,000 244,200 161,900
Property and equipment, gross 882,800 827,500 717,400 669,100 540,200 435,000
Land 87,200 87,200 49,600 49,600
Asset Age Ratio
Average age1 66.40% 63.45% 59.75% 51.82% 45.21% 37.22%

Based on: 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31).

2023 Calculations

1 Average age = 100 × Accumulated depreciation ÷ (Property and equipment, gross – Land)
= 100 × 528,300 ÷ (882,80087,200) = 66.40%

Asset age ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company fixed asset base is old or new. Newer assets are likely to be more efficient. Palo Alto Networks Inc. average age ratio of depreciable property, plant and equipment deteriorated from 2021 to 2022 and from 2022 to 2023.

Estimated Total Useful Life

Microsoft Excel
Jul 31, 2023 Jul 31, 2022 Jul 31, 2021 Jul 31, 2020 Jul 31, 2019 Jul 31, 2018
Selected Financial Data (US$ in thousands)
Property and equipment, gross 882,800 827,500 717,400 669,100 540,200 435,000
Land 87,200 87,200 49,600 49,600
Depreciation expense 95,900 92,800 94,200 96,000 86,200 74,700
Asset Age Ratio (Years)
Estimated total useful life1 8 8 7 6 6 6

Based on: 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31).

2023 Calculations

1 Estimated total useful life = (Property and equipment, gross – Land) ÷ Depreciation expense
= (882,80087,200) ÷ 95,900 = 8

Asset age ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company depreciation policy and can be used for comparisons with competitors. Palo Alto Networks Inc. estimated total useful life of depreciable property, plant and equipment increased from 2021 to 2022 and from 2022 to 2023.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel
Jul 31, 2023 Jul 31, 2022 Jul 31, 2021 Jul 31, 2020 Jul 31, 2019 Jul 31, 2018
Selected Financial Data (US$ in thousands)
Accumulated depreciation 528,300 469,700 399,000 321,000 244,200 161,900
Depreciation expense 95,900 92,800 94,200 96,000 86,200 74,700
Asset Age Ratio (Years)
Time elapsed since purchase1 6 5 4 3 3 2

Based on: 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31).

2023 Calculations

1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= 528,300 ÷ 95,900 = 6

Asset age ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company fixed assets. Useful for comparison purposes. Palo Alto Networks Inc. estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2021 to 2022 and from 2022 to 2023.

Estimated Remaining Life

Microsoft Excel
Jul 31, 2023 Jul 31, 2022 Jul 31, 2021 Jul 31, 2020 Jul 31, 2019 Jul 31, 2018
Selected Financial Data (US$ in thousands)
Property and equipment, net 354,500 357,800 318,400 348,100 296,000 273,100
Land 87,200 87,200 49,600 49,600
Depreciation expense 95,900 92,800 94,200 96,000 86,200 74,700
Asset Age Ratio (Years)
Estimated remaining life1 3 3 3 3 3 4

Based on: 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31).

2023 Calculations

1 Estimated remaining life = (Property and equipment, net – Land) ÷ Depreciation expense
= (354,50087,200) ÷ 95,900 = 3

Asset age ratio Description The company
Estimated remaining life Palo Alto Networks Inc. estimated remaining life of depreciable property, plant and equipment increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.