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)
Palo Alto Networks Inc., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2024-07-31), 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).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibited a consistent upward trajectory from 9.8 in 2019 to 22.23 in 2024. This indicates an increasing efficiency in utilizing fixed assets to generate revenue over the analyzed period, with a notable acceleration from 2021 onwards.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- When including operating lease right-of-use assets, the turnover ratio initially declined sharply from 9.8 in 2019 to 5.62 in 2020. Subsequently, it rebounded gradually to reach 10.75 in 2024. Although improving, the ratio remains considerably lower compared to the net fixed asset turnover excluding these assets, suggesting differences in asset utilization measurement driven by the incorporation of lease assets.
- Total Asset Turnover
- The total asset turnover ratio showed moderate volatility across the periods. Starting at 0.44 in 2019, it decreased to 0.38 in 2020, then recovered somewhat to peak at 0.48 in 2023, before declining again to 0.4 in 2024. Overall, this indicates relatively stable but moderate efficiency in utilizing total assets to generate revenue, with no clear upward or downward trend.
- Equity Turnover
- Equity turnover demonstrated considerable fluctuations throughout the years. Beginning at 1.83 in 2019, it rose significantly to 3.09 in 2020 and then surged sharply to 26.2 in 2022, an outlier likely reflecting exceptional conditions or changes in equity or sales. After this peak, the ratio decreased substantially to 3.94 in 2023 and further to 1.55 in 2024, below the initial level. This pattern indicates high variability in how the company employs shareholders' equity to generate revenue.
Net Fixed Asset Turnover
Palo Alto Networks Inc., net fixed asset turnover calculation, comparison to benchmarks
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | Jul 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Revenue | 8,027,500) | 6,892,700) | 5,501,500) | 4,256,100) | 3,408,400) | 2,899,600) | |
| Property and equipment, net | 361,100) | 354,500) | 357,800) | 318,400) | 348,100) | 296,000) | |
| Long-term Activity Ratio | |||||||
| Net fixed asset turnover1 | 22.23 | 19.44 | 15.38 | 13.37 | 9.79 | 9.80 | |
| Benchmarks | |||||||
| Net Fixed Asset Turnover, Competitors2 | |||||||
| Accenture PLC | 42.66 | 41.90 | 37.12 | 30.83 | 28.68 | 31.06 | |
| Adobe Inc. | 11.11 | 9.56 | 9.23 | 9.44 | 8.48 | 8.64 | |
| Cadence Design Systems Inc. | 10.13 | 10.14 | 9.59 | 9.77 | 8.62 | — | |
| CrowdStrike Holdings Inc. | 4.93 | 4.55 | 5.57 | 5.24 | 3.54 | — | |
| Fair Isaac Corp. | 44.65 | 138.02 | 78.34 | 47.17 | 27.89 | 21.88 | |
| International Business Machines Corp. | 10.95 | 11.25 | 11.35 | 10.07 | 7.33 | — | |
| Intuit Inc. | 16.14 | 14.83 | 14.33 | 12.35 | 10.46 | 8.70 | |
| Microsoft Corp. | 1.81 | 2.22 | 2.66 | 2.81 | 3.24 | 3.45 | |
| Oracle Corp. | 2.46 | 2.93 | 4.37 | 5.74 | 6.26 | — | |
| Palantir Technologies Inc. | 72.29 | 46.59 | 27.55 | 49.26 | 36.99 | — | |
| Salesforce Inc. | 9.45 | 8.47 | 9.41 | 8.64 | 7.20 | — | |
| ServiceNow Inc. | 6.23 | 6.61 | 6.88 | 7.70 | 6.85 | — | |
| Synopsys Inc. | 10.88 | 10.48 | 10.51 | 8.90 | 7.62 | 7.82 | |
| Workday Inc. | 5.88 | 5.17 | 4.58 | 4.44 | 3.87 | — | |
| Net Fixed Asset Turnover, Sector | |||||||
| Software & Services | 3.08 | 3.75 | 4.49 | 4.73 | 5.15 | — | |
| Net Fixed Asset Turnover, Industry | |||||||
| Information Technology | 3.47 | 3.78 | 4.44 | 4.74 | 4.57 | — | |
Based on: 10-K (reporting date: 2024-07-31), 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).
1 2024 Calculation
Net fixed asset turnover = Revenue ÷ Property and equipment, net
= 8,027,500 ÷ 361,100 = 22.23
2 Click competitor name to see calculations.
- Revenue Trends
- Revenue has exhibited consistent and substantial growth over the observed six-year period. Starting at approximately $2.9 billion in 2019, revenue increased steadily each year, reaching nearly $8.03 billion by 2024. The growth trajectory is marked by accelerating increases, with the most pronounced expansions occurring between 2021 and 2024. This suggests the company has been successful in scaling its operations and expanding its market presence effectively.
- Property and Equipment, Net
- The net value of property and equipment shows a moderately fluctuating trend. Starting at $296 million in 2019, it rose to $348.1 million in 2020, then decreased slightly in 2021 to $318.4 million. This figure climbed again in 2022 to $357.8 million, only to marginally decrease in 2023 before increasing slightly again in 2024 to $361.1 million. Overall, the net property and equipment asset base has remained relatively stable with minor variations that do not indicate substantial expansion or contraction in fixed asset holdings.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio demonstrates a strong and consistent improvement throughout the period. Beginning at 9.8 in 2019, the ratio holds steady in 2020 before showing marked increases year-over-year: 13.37 in 2021, 15.38 in 2022, 19.44 in 2023, and culminating at 22.23 in 2024. This upward trend signals a significant enhancement in the company's efficiency in utilizing its fixed assets to generate revenue. It may indicate improvements in asset management, operational efficiency, or increased revenue generation without proportional growth in fixed assets.
- Overall Insights
- The financial data reveals a company that is growing revenue at a robust pace while maintaining a relatively stable asset base in terms of property and equipment. The steadily increasing net fixed asset turnover ratio highlights enhanced efficiency in leveraging fixed assets to boost revenue. This combination suggests operational optimization and effective capital allocation over the periods analyzed. There is no indication of overinvestment in fixed assets relative to revenue growth, which is a positive indicator of asset utilization efficiency.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Palo Alto Networks Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | Jul 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Revenue | 8,027,500) | 6,892,700) | 5,501,500) | 4,256,100) | 3,408,400) | 2,899,600) | |
| Property and equipment, net | 361,100) | 354,500) | 357,800) | 318,400) | 348,100) | 296,000) | |
| Operating lease right-of-use assets | 385,900) | 263,300) | 242,000) | 262,900) | 258,700) | —) | |
| Property and equipment, net (including operating lease, right-of-use asset) | 747,000) | 617,800) | 599,800) | 581,300) | 606,800) | 296,000) | |
| Long-term Activity Ratio | |||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 10.75 | 11.16 | 9.17 | 7.32 | 5.62 | 9.80 | |
| Benchmarks | |||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | |||||||
| Accenture PLC | 15.17 | 15.38 | 13.17 | 10.48 | 9.37 | 31.06 | |
| Adobe Inc. | 9.70 | 8.13 | 7.61 | 7.46 | 6.42 | 8.64 | |
| Cadence Design Systems Inc. | 7.68 | 7.38 | 6.57 | 6.85 | 6.04 | — | |
| CrowdStrike Holdings Inc. | 4.57 | 4.21 | 4.97 | 4.30 | 3.54 | — | |
| Fair Isaac Corp. | 25.24 | 41.28 | 25.38 | 17.51 | 12.44 | 21.88 | |
| International Business Machines Corp. | 7.03 | 7.09 | 7.37 | 6.43 | 5.00 | — | |
| Intuit Inc. | 11.47 | 9.99 | 8.86 | 8.30 | 8.00 | 8.70 | |
| Microsoft Corp. | 1.59 | 1.93 | 2.26 | 2.37 | 2.70 | 2.87 | |
| Oracle Corp. | 1.84 | 2.31 | 3.21 | 4.20 | 4.74 | — | |
| Palantir Technologies Inc. | 11.92 | 9.65 | 7.07 | 6.21 | 4.43 | — | |
| Salesforce Inc. | 5.76 | 4.76 | 4.65 | 3.75 | 3.16 | — | |
| ServiceNow Inc. | 4.47 | 4.33 | 4.18 | 4.34 | 4.06 | — | |
| Synopsys Inc. | 5.43 | 5.19 | 4.87 | 4.35 | 3.88 | 7.82 | |
| Workday Inc. | 4.77 | 4.29 | 3.75 | 3.11 | 2.96 | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | |||||||
| Software & Services | 2.54 | 3.04 | 3.50 | 3.58 | 3.82 | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | |||||||
| Information Technology | 3.05 | 3.32 | 3.85 | 4.03 | 3.87 | — | |
Based on: 10-K (reporting date: 2024-07-31), 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).
1 2024 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenue ÷ Property and equipment, net (including operating lease, right-of-use asset)
= 8,027,500 ÷ 747,000 = 10.75
2 Click competitor name to see calculations.
The annual financial data indicates a consistent upward trend in revenue over the six-year period. Revenue increased steadily from $2.8996 billion in the fiscal year ending July 31, 2019, reaching $8.0275 billion by July 31, 2024. This represents nearly a threefold increase, demonstrating sustained growth.
Property and equipment, net, including operating lease right-of-use assets, exhibited growth from $296 million in 2019 to $747 million in 2024. Although there was a significant jump from 2019 to 2020, followed by a slight decline in 2021, the overall trend is upward, with a notable increase in the most recent year.
The net fixed asset turnover ratio, which measures revenue generated per dollar of fixed assets, showed considerable fluctuation across the years. The ratio started at 9.8 in 2019, dropped sharply to 5.62 in 2020, rebounded to 7.32 in 2021, and continued to increase to 11.16 by 2023, before slightly declining to 10.75 in 2024. This pattern suggests periods of varying efficiency in asset utilization, with a general improvement after the dip in 2020, indicating better management or increased asset productivity in recent years.
- Revenue
- Steadily increased from $2.9 billion in 2019 to $8.0 billion in 2024, marking strong, consistent growth.
- Property and Equipment, Net
- Increased overall from $296 million to $747 million, with a pronounced jump between 2019 and 2020 and a mild decline in 2021, then rising again through 2024.
- Net Fixed Asset Turnover Ratio
- Displayed volatility, falling sharply in 2020 but improving thereafter, reaching a peak in 2023 before a minor dip in 2024, reflecting fluctuating but generally improving efficiency in asset use.
Total Asset Turnover
Palo Alto Networks Inc., total asset turnover calculation, comparison to benchmarks
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | Jul 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Revenue | 8,027,500) | 6,892,700) | 5,501,500) | 4,256,100) | 3,408,400) | 2,899,600) | |
| Total assets | 19,990,900) | 14,501,100) | 12,253,600) | 10,241,600) | 9,065,400) | 6,592,200) | |
| Long-term Activity Ratio | |||||||
| Total asset turnover1 | 0.40 | 0.48 | 0.45 | 0.42 | 0.38 | 0.44 | |
| Benchmarks | |||||||
| Total Asset Turnover, Competitors2 | |||||||
| Accenture PLC | 1.16 | 1.25 | 1.30 | 1.17 | 1.20 | 1.45 | |
| Adobe Inc. | 0.71 | 0.65 | 0.65 | 0.58 | 0.53 | 0.54 | |
| Cadence Design Systems Inc. | 0.52 | 0.72 | 0.69 | 0.68 | 0.68 | — | |
| CrowdStrike Holdings Inc. | 0.46 | 0.45 | 0.40 | 0.32 | 0.34 | — | |
| Fair Isaac Corp. | 1.00 | 0.96 | 0.96 | 0.84 | 0.81 | 0.81 | |
| International Business Machines Corp. | 0.46 | 0.46 | 0.48 | 0.43 | 0.47 | — | |
| Intuit Inc. | 0.51 | 0.52 | 0.46 | 0.62 | 0.70 | 1.08 | |
| Microsoft Corp. | 0.48 | 0.51 | 0.54 | 0.50 | 0.47 | 0.44 | |
| Oracle Corp. | 0.38 | 0.37 | 0.39 | 0.31 | 0.34 | — | |
| Palantir Technologies Inc. | 0.45 | 0.49 | 0.55 | 0.47 | 0.41 | — | |
| Salesforce Inc. | 0.35 | 0.32 | 0.28 | 0.32 | 0.31 | — | |
| ServiceNow Inc. | 0.54 | 0.52 | 0.54 | 0.55 | 0.52 | — | |
| Synopsys Inc. | 0.47 | 0.57 | 0.54 | 0.48 | 0.46 | 0.52 | |
| Workday Inc. | 0.44 | 0.46 | 0.49 | 0.50 | 0.53 | — | |
| Total Asset Turnover, Sector | |||||||
| Software & Services | 0.49 | 0.51 | 0.53 | 0.49 | 0.48 | — | |
| Total Asset Turnover, Industry | |||||||
| Information Technology | 0.58 | 0.61 | 0.65 | 0.62 | 0.58 | — | |
Based on: 10-K (reporting date: 2024-07-31), 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).
1 2024 Calculation
Total asset turnover = Revenue ÷ Total assets
= 8,027,500 ÷ 19,990,900 = 0.40
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the six-year period under review. Revenue demonstrates a consistent upward trajectory, rising from approximately $2.9 billion in the earliest period to over $8 billion in the most recent year. This reflects robust growth and suggests expanding operations or improved market penetration.
Total assets also show a significant increase, growing from about $6.6 billion to nearly $20 billion across the same timeframe. This substantial asset base expansion indicates considerable investment in resources, infrastructure, or acquisitions to support the company's growth strategy.
Despite the increasing asset base and revenue growth, the total asset turnover ratio exhibits variability. Initially, this ratio decreases from 0.44 to 0.38, indicating a temporary decline in revenue generated per dollar of assets. Following this, the ratio improves steadily, reaching 0.48 before falling back to 0.40 in the final period. This fluctuation suggests changes in asset utilization efficiency, where early inefficiencies may have been addressed but were not fully sustained in the latter years.
Overall, the company's expansion in revenue and assets highlights aggressive growth, though the inconsistency in asset turnover implies opportunities exist to enhance operational efficiency and better leverage the asset base to generate revenue.
- Revenue
- Consistent and strong growth, increasing from $2.9 billion in 2019 to $8 billion in 2024.
- Total assets
- Marked increase from $6.6 billion in 2019 to nearly $20 billion in 2024, indicating significant capital investment.
- Total asset turnover
- Variable trend: initial decline from 0.44 to 0.38, followed by improvement to 0.48, then a drop to 0.40, reflecting fluctuating efficiency in asset utilization.
Equity Turnover
Palo Alto Networks Inc., equity turnover calculation, comparison to benchmarks
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | Jul 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Revenue | 8,027,500) | 6,892,700) | 5,501,500) | 4,256,100) | 3,408,400) | 2,899,600) | |
| Stockholders’ equity | 5,169,700) | 1,748,400) | 210,000) | 634,500) | 1,101,800) | 1,586,300) | |
| Long-term Activity Ratio | |||||||
| Equity turnover1 | 1.55 | 3.94 | 26.20 | 6.71 | 3.09 | 1.83 | |
| Benchmarks | |||||||
| Equity Turnover, Competitors2 | |||||||
| Accenture PLC | 2.29 | 2.50 | 2.79 | 2.59 | 2.61 | 3.00 | |
| Adobe Inc. | 1.52 | 1.18 | 1.25 | 1.07 | 0.97 | 1.06 | |
| Cadence Design Systems Inc. | 0.99 | 1.20 | 1.30 | 1.09 | 1.08 | — | |
| CrowdStrike Holdings Inc. | 1.33 | 1.53 | 1.42 | 1.00 | 0.65 | — | |
| Fair Isaac Corp. | — | — | — | — | 3.91 | 4.00 | |
| International Business Machines Corp. | 2.30 | 2.75 | 2.76 | 3.03 | 3.57 | — | |
| Intuit Inc. | 0.88 | 0.83 | 0.77 | 0.98 | 1.50 | 1.81 | |
| Microsoft Corp. | 0.91 | 1.03 | 1.19 | 1.18 | 1.21 | 1.23 | |
| Oracle Corp. | 6.08 | 46.56 | — | 7.73 | 3.24 | — | |
| Palantir Technologies Inc. | 0.57 | 0.64 | 0.74 | 0.67 | 0.72 | — | |
| Salesforce Inc. | 0.58 | 0.54 | 0.46 | 0.51 | 0.50 | — | |
| ServiceNow Inc. | 1.14 | 1.18 | 1.44 | 1.60 | 1.59 | — | |
| Synopsys Inc. | 0.68 | 0.95 | 0.92 | 0.79 | 0.75 | 0.82 | |
| Workday Inc. | 0.90 | 1.11 | 1.13 | 1.32 | 1.46 | — | |
| Equity Turnover, Sector | |||||||
| Software & Services | 1.16 | 1.30 | 1.44 | 1.44 | 1.51 | — | |
| Equity Turnover, Industry | |||||||
| Information Technology | 1.42 | 1.57 | 1.74 | 1.80 | 1.82 | — | |
Based on: 10-K (reporting date: 2024-07-31), 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).
1 2024 Calculation
Equity turnover = Revenue ÷ Stockholders’ equity
= 8,027,500 ÷ 5,169,700 = 1.55
2 Click competitor name to see calculations.
- Revenue Trends
- Revenue demonstrates a consistent and substantial upward trend over the six-year period. Starting at approximately 2.9 billion US dollars in 2019, revenue increased annually to reach about 8.0 billion US dollars in 2024. This reflects significant growth, particularly notable between 2021 and 2022, where revenue jumped by over 1.2 billion US dollars.
- Stockholders’ Equity Patterns
- Stockholders’ equity shows notable volatility. Initially, equity decreased sharply from roughly 1.59 billion US dollars in 2019 to a low of 210 million US dollars in 2022. Following this decline, equity rebounded significantly, rising to approximately 5.17 billion US dollars by 2024. This fluctuation indicates considerable changes in retained earnings, capital structure, or other equity components during the period.
- Equity Turnover Ratio Analysis
- The equity turnover ratio exhibits substantial variation, starting at 1.83 in 2019, increasing to a peak of 26.2 in 2022, and subsequently declining to 1.55 in 2024. The spike in 2022 corresponds to the lowest stockholders’ equity during the period combined with a rapidly growing revenue base, resulting in high asset utilization relative to equity at that time. The subsequent decrease in the ratio is consistent with the recovery in equity observed in the later years.
- Overall Insights
- The company’s revenue growth trajectory is robust and continuous, indicating strong operational performance. However, equity fluctuations imply potentially significant financial restructuring or other factors affecting shareholders’ funds. The equity turnover ratio highlights the dynamic relationship between revenue generation and equity base, with a peak reflecting operational efficiency under constrained equity, followed by normalization as equity strengthens.