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)
Roper Technologies 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).
An analysis of investment activity ratios reveals a divergence between fixed asset efficiency and overall asset productivity. While the utilization of net fixed assets has improved significantly, there is a consistent downward trend in the efficiency of total assets and equity.
- Net Fixed Asset Turnover
- A strong upward trajectory is observed, with the ratio increasing from 40.34 in 2018 to 62.98 in 2022. The most pronounced growth occurred after 2020, indicating a marked increase in revenue generation per unit of net fixed assets.
- Net Fixed Asset Turnover (including operating lease, right-of-use asset)
- A significant structural shift occurred between 2018 and 2019, where the ratio dropped from 40.34 to 13.19. This sharp decline suggests the impact of lease capitalization on the balance sheet. Following this initial adjustment, the ratio exhibited a gradual recovery, rising to 19.09 by 2022.
- Total Asset Turnover
- A persistent decline is evident, with the ratio falling from 0.34 in 2018 to 0.20 in 2022. This trend indicates that total asset growth has outpaced revenue growth over the five-year period, resulting in diminished overall asset productivity.
- Equity Turnover
- The ratio exhibits a steady downward trend, decreasing from 0.67 in 2018 to 0.33 in 2022. This indicates a reduction in the volume of sales generated relative to the equity base, reflecting a decrease in the efficiency of shareholder-funded capital in driving revenue.
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Net Fixed Asset Turnover
Roper Technologies 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) | ||||||
| Net revenues | 5,371,800) | 5,777,800) | 5,527,100) | 5,366,800) | 5,191,200) | |
| Property, plant and equipment, net | 85,300) | 102,800) | 140,600) | 139,900) | 128,700) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 62.98 | 56.20 | 39.31 | 38.36 | 40.34 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Apple Inc. | 9.36 | 9.28 | — | — | — | |
| Arista Networks Inc. | 46.11 | 37.49 | — | — | — | |
| Cisco Systems Inc. | 25.82 | 21.31 | — | — | — | |
| Dell Technologies Inc. | 18.69 | 14.65 | — | — | — | |
| Lumentum Holdings Inc. | 4.75 | 4.83 | — | — | — | |
| Super Micro Computer Inc. | 18.17 | 12.95 | — | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Technology Hardware & Equipment | 11.11 | 10.59 | — | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Information Technology | 4.46 | 4.76 | — | — | — | |
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 = Net revenues ÷ Property, plant and equipment, net
= 5,371,800 ÷ 85,300 = 62.98
2 Click competitor name to see calculations.
The analysis of long-term investment activity between 2018 and 2022 reveals a significant increase in the efficiency of fixed asset utilization, characterized by a sharp rise in the net fixed asset turnover ratio during the latter part of the period.
- Revenue Performance
- Net revenues exhibited a consistent upward trajectory from 2018 to 2021, growing from approximately 5.19 billion US dollars to a peak of 5.78 billion US dollars. A contraction occurred in 2022, with revenues decreasing to 5.37 billion US dollars.
- Fixed Asset Base
- Property, plant, and equipment, net, remained relatively stable between 2018 and 2020, peaking at 140.6 million US dollars. Starting in 2021, a notable downward trend emerged, with net fixed assets falling to 102.8 million US dollars in 2021 and further declining to 85.3 million US dollars by the end of 2022.
- Net Fixed Asset Turnover Dynamics
- The net fixed asset turnover ratio remained stable within a range of 38.36 to 40.34 from 2018 through 2020. A substantial acceleration is observed beginning in 2021, with the ratio climbing to 56.20, and reaching a peak of 62.98 in 2022. This increase is primarily driven by the contraction of the net fixed asset base; the ratio continued to rise in 2022 despite the observed decline in total revenues, indicating a shift toward a more asset-light operational model.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Roper Technologies 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) | ||||||
| Net revenues | 5,371,800) | 5,777,800) | 5,527,100) | 5,366,800) | 5,191,200) | |
| Property, plant and equipment, net | 85,300) | 102,800) | 140,600) | 139,900) | 128,700) | |
| Operating lease ROU assets (included in Other assets) | 196,100) | 221,000) | 265,000) | 266,900) | —) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 281,400) | 323,800) | 405,600) | 406,800) | 128,700) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 19.09 | 17.84 | 13.63 | 13.19 | 40.34 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Apple Inc. | 7.51 | 7.39 | — | — | — | |
| Arista Networks Inc. | 29.52 | 20.50 | — | — | — | |
| Cisco Systems Inc. | 17.19 | 14.51 | — | — | — | |
| Dell Technologies Inc. | 16.10 | 11.02 | — | — | — | |
| Lumentum Holdings Inc. | 3.95 | 4.07 | — | — | — | |
| Super Micro Computer Inc. | 16.78 | 12.07 | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Technology Hardware & Equipment | 8.90 | 8.31 | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Information Technology | 3.87 | 4.04 | — | — | — | |
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) = Net revenues ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= 5,371,800 ÷ 281,400 = 19.09
2 Click competitor name to see calculations.
The analysis of long-term activity ratios reveals a significant structural shift in asset utilization between 2018 and 2019, followed by a gradual trend toward efficiency recovery through 2022. While net revenues exhibited moderate growth for the majority of the period, the net fixed asset turnover ratio was primarily driven by substantial fluctuations in the property, plant, and equipment (PPE) base, including right-of-use assets.
- Net Revenue Trends
- Revenues demonstrated a consistent upward trajectory from 2018 to 2021, rising from 5.19 billion US$ to a peak of 5.78 billion US$. However, a reversal occurred in 2022, with revenues contracting to 5.37 billion US$, returning to levels similar to those observed in 2019.
- Fixed Asset Base Dynamics
- A substantial increase in net PPE occurred in 2019, where the asset base expanded from 128.7 million US$ to 406.8 million US$. This sharp expansion remained relatively stable in 2020 before entering a period of steady decline, reaching 281.4 million US$ by the end of 2022. This suggests a strategic reduction in long-term assets or the expiration of right-of-use lease obligations.
- Net Fixed Asset Turnover Analysis
- The net fixed asset turnover ratio experienced a drastic decline from 40.34 in 2018 to 13.19 in 2019, directly correlating with the surge in the asset base. From 2019 onward, the ratio trended upward, reaching 19.09 by 2022. It is notable that the improvement in turnover from 2021 to 2022 occurred despite a decrease in net revenues, indicating that the increase in efficiency was driven predominantly by the reduction of the net fixed asset base rather than revenue growth.
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Total Asset Turnover
Roper Technologies 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) | ||||||
| Net revenues | 5,371,800) | 5,777,800) | 5,527,100) | 5,366,800) | 5,191,200) | |
| Total assets | 26,980,800) | 23,713,900) | 24,024,800) | 18,108,900) | 15,249,500) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.20 | 0.24 | 0.23 | 0.30 | 0.34 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Apple Inc. | 1.12 | 1.04 | — | — | — | |
| Arista Networks Inc. | 0.65 | 0.51 | — | — | — | |
| Cisco Systems Inc. | 0.55 | 0.51 | — | — | — | |
| Dell Technologies Inc. | 1.09 | 0.76 | — | — | — | |
| Lumentum Holdings Inc. | 0.41 | 0.49 | — | — | — | |
| Super Micro Computer Inc. | 1.62 | 1.59 | — | — | — | |
| Total Asset Turnover, Sector | ||||||
| Technology Hardware & Equipment | 1.01 | 0.89 | — | — | — | |
| Total Asset Turnover, Industry | ||||||
| Information Technology | 0.64 | 0.62 | — | — | — | |
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 = Net revenues ÷ Total assets
= 5,371,800 ÷ 26,980,800 = 0.20
2 Click competitor name to see calculations.
An analysis of the investment activity ratios reveals a consistent decline in asset utilization efficiency from 2018 through 2022.
- Total Asset Turnover Trend
- The total asset turnover ratio demonstrates a clear downward trajectory, decreasing from 0.34 in 2018 to 0.20 by the end of 2022. This progression indicates that the company is generating progressively less revenue per unit of assets employed over the five-year period.
- Revenue Performance
- Net revenues exhibited moderate growth between 2018 and 2021, rising from US$ 5.19 billion to a peak of US$ 5.78 billion. However, a contraction occurred in 2022, with revenues declining to US$ 5.37 billion, effectively returning to 2019 levels.
- Asset Base Expansion
- The total asset base expanded substantially, increasing from US$ 15.25 billion in 2018 to US$ 26.98 billion in 2022. A significant increase was observed between 2019 and 2020, where assets grew by approximately US$ 5.92 billion.
- Efficiency Correlation
- The erosion of the turnover ratio is primarily attributable to the fact that asset growth significantly outpaced revenue growth. While total assets increased by approximately 77% over the analyzed period, net revenues grew by only 3%. This divergence highlights a decrease in the productivity of the company's asset base in generating sales.
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Equity Turnover
Roper Technologies 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) | ||||||
| Net revenues | 5,371,800) | 5,777,800) | 5,527,100) | 5,366,800) | 5,191,200) | |
| Stockholders’ equity | 16,037,800) | 11,563,800) | 10,479,800) | 9,491,900) | 7,738,500) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 0.33 | 0.50 | 0.53 | 0.57 | 0.67 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Apple Inc. | 7.78 | 5.80 | — | — | — | |
| Arista Networks Inc. | 0.90 | 0.74 | — | — | — | |
| Cisco Systems Inc. | 1.30 | 1.21 | — | — | — | |
| Dell Technologies Inc. | — | 38.01 | — | — | — | |
| Lumentum Holdings Inc. | 0.91 | 0.88 | — | — | — | |
| Super Micro Computer Inc. | 3.64 | 3.25 | — | — | — | |
| Equity Turnover, Sector | ||||||
| Technology Hardware & Equipment | 5.76 | 4.55 | — | — | — | |
| Equity Turnover, Industry | ||||||
| Information Technology | 1.71 | 1.77 | — | — | — | |
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 = Net revenues ÷ Stockholders’ equity
= 5,371,800 ÷ 16,037,800 = 0.33
2 Click competitor name to see calculations.
The analysis of investment activity ratios reveals a consistent decline in the efficiency of equity utilization over the five-year period ending December 31, 2022. A divergent trend is observed between the growth of the equity base and the generation of net revenues, resulting in a progressive reduction of the equity turnover ratio.
- Net Revenue Trends
- Net revenues experienced a period of moderate growth between 2018 and 2021, rising from 5.19 billion US$ to a peak of 5.78 billion US$. However, this trend reversed in 2022, with revenues declining to 5.37 billion US$, effectively returning to 2019 levels.
- Stockholders' Equity Expansion
- Stockholders' equity demonstrated aggressive and uninterrupted growth throughout the period. Equity increased from 7.74 billion US$ in 2018 to 16.04 billion US$ in 2022. The growth trajectory accelerated sharply in the final year, with an increase of approximately 4.47 billion US$ between 2021 and 2022 alone.
- Equity Turnover Performance
- The equity turnover ratio shows a continuous downward trend, decreasing from 0.67 in 2018 to 0.33 in 2022. This indicates that the company is generating significantly less revenue per unit of equity over time. The deterioration of this ratio is primarily attributed to the capital base expanding at a rate that far exceeds revenue growth, a phenomenon that became most pronounced in 2022 when falling revenues coincided with a substantial spike in equity.
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