Analysis of Property, Plant and Equipment
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- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Debt to Equity since 2005
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Property, Plant and Equipment Disclosure
Ross Stores Inc., balance sheet: property, plant and equipment
US$ in thousands
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
- Land and buildings
- The value of land and buildings shows a steady upward trend over the six-year period. Beginning at approximately 1.1 billion US dollars in early 2017, it increases incrementally each year, reaching about 1.24 billion US dollars by early 2022. This reflects a consistent investment or appreciation in these assets.
- Fixtures and equipment
- Fixtures and equipment display a significant growth trajectory. Starting at roughly 2.42 billion US dollars in 2017, the value rises consistently every year, reaching approximately 3.43 billion US dollars by 2022. The increase suggests ongoing investment in operational assets, likely supporting business growth or modernization.
- Leasehold improvements
- Leasehold improvements exhibit a steady increase throughout the period analyzed. From about 999 million US dollars in 2017, the value climbs year over year to about 1.33 billion US dollars in 2022. This indicates continuous enhancements or upgrades to leased properties, aligning with expansion or refurbishment activities.
- Construction-in-progress
- The construction-in-progress category shows the most pronounced growth among asset types, starting at nearly 70 million US dollars in 2017 and escalating to approximately 574 million US dollars by 2022. The marked rise especially in the latter years points to a substantial amount of ongoing capital projects or development activities during this timeframe.
- Property and equipment, gross
- The gross property and equipment amount increases steadily across all periods, beginning at about 4.59 billion US dollars in 2017 and reaching roughly 6.57 billion US dollars in 2022. This upward trend reflects the cumulative effect of acquisitions, improvements, and ongoing construction activities.
- Accumulated depreciation and amortization
- Accumulated depreciation and amortization grow in absolute value over the years, increasing from approximately -2.26 billion US dollars in 2017 to about -3.67 billion US dollars in 2022. This increasing negative balance reflects the systematic allocation of asset costs over their useful lives and is consistent with the incremental growth in gross assets.
- Property and equipment, net
- The net property and equipment account shows a generally positive trend, increasing from around 2.33 billion US dollars in 2017 to approximately 2.9 billion US dollars in 2022. The growth is steady, though not as pronounced as the gross figures, indicating that while asset acquisitions and improvements are rising, depreciation is proportionally affecting the net carrying amounts.
Asset Age Ratios (Summary)
Ross Stores Inc., asset age ratios
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
- Average age ratio
- The average age ratio shows a consistent upward trend over the observed six-year period. Starting at 49.29% in early 2017, it increased steadily each year, reaching 55.90% by early 2022. This progression suggests that the property, plant, and equipment assets have been aging progressively without significant changes in asset renewal or replacement strategies. The increase in average age ratio could reflect slower capital expenditures or an extension of the useful life of existing assets. Monitoring this upward trend is important as it may impact depreciation expenses and could signal the need for future investments in new assets to maintain operational efficiency.
Average Age
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
2022 Calculations
1 Average age = 100 × Accumulated depreciation and amortization ÷ Property and equipment, gross
= 100 × ÷ =
- Property and Equipment, Gross
- The gross value of property and equipment shows a consistent upward trend over the six-year period. Starting at approximately $4.59 billion in early 2017, it steadily increased each year, reaching about $6.57 billion by early 2022. This growth suggests continuous investment in physical assets.
- Accumulated Depreciation and Amortization
- Accumulated depreciation and amortization also increased steadily from approximately $2.26 billion in 2017 to around $3.67 billion in 2022. This trend aligns with the growth in gross property and equipment, reflecting ongoing asset aging and utilization over time.
- Average Age Ratio
- The average age ratio shows a gradual increase from 49.29% in 2017 to 55.9% in 2022. This indicates that, on average, the asset base is aging, with the ratio increasing by over 6 percentage points during the period. The highest yearly increase occurred between 2020 and 2021, suggesting a possible slowdown in asset turnover or replacement during that interval.
- Overall Insights
- The simultaneous increase in property and equipment gross value and accumulated depreciation indicates sustained asset acquisition alongside aging assets. The rising average age ratio implies that the company’s assets are becoming older on average, which may affect maintenance costs and future capital expenditure requirements. This pattern points to the need for ongoing asset management to balance growth with asset renewal.