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.
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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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Long-term Activity Ratios (Summary)
Ross Stores Inc., long-term (investment) activity 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).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio showed a generally stable to slightly increasing trend from 2017 to 2019, rising from 5.53 to 6.05. The ratio remained nearly constant in 2020 at 6.04 but then declined significantly in 2021 to 4.62, before recovering sharply to 6.53 in 2022. This pattern indicates fluctuations in the efficiency with which fixed assets were used to generate sales, with a notable dip followed by a strong rebound in the most recent year.
- Net Fixed Asset Turnover Including Operating Lease, Right-of-Use Asset
- When including operating lease right-of-use assets, the turnover ratio mirrored the initial increasing trend through 2019 but experienced a pronounced decline starting in 2020. The ratio dropped from 6.05 in 2019 to 2.81 in 2020 and further decreased to 2.16 in 2021. There was a moderate recovery in 2022 to 3.19, yet the values remained substantially lower than prior to 2020. This indicates the impact of leasing assets on asset utilization metrics, likely reflecting changes in accounting treatment or operational adjustments related to leases.
- Total Asset Turnover
- This ratio demonstrated a downward trajectory over the examined period. It remained stable near 2.4-2.5 from 2017 to 2019, but declined steeply to 1.72 in 2020, then further to 0.99 in 2021. A partial recovery occurred in 2022, with the ratio rising to 1.39. The trend suggests a reduced effectiveness in utilizing total assets to generate revenue, with the lowest asset turnover observed in 2021 amid possible external or internal challenges, followed by some improvement in the latest year.
- Equity Turnover
- The equity turnover ratio was relatively stable, fluctuating slightly around 4.6 from 2017 to 2019. It peaked at 4.77 in 2020, then declined to 3.81 in 2021, before rebounding to 4.66 in 2022. This indicates that the company’s ability to generate sales from shareholder equity experienced minor volatility but generally maintained a consistent level of performance, with a noticeable dip during 2021.
Net Fixed Asset Turnover
Ross Stores Inc., net fixed asset turnover calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Sales | |||||||
| Property and equipment, net | |||||||
| Long-term Activity Ratio | |||||||
| Net fixed asset turnover1 | |||||||
| Benchmarks | |||||||
| Net Fixed Asset Turnover, Competitors2 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
| Net Fixed Asset Turnover, Sector | |||||||
| Consumer Discretionary Distribution & Retail | |||||||
| Net Fixed Asset Turnover, Industry | |||||||
| Consumer Discretionary | |||||||
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).
1 2022 Calculation
Net fixed asset turnover = Sales ÷ Property and equipment, net
= ÷ =
2 Click competitor name to see calculations.
- Sales Trend
- Sales presented a general upward trend from 2017 to 2020, rising from approximately $12.87 billion to $16.04 billion. In 2021, there was a significant decline to about $12.53 billion, followed by a strong recovery in 2022, reaching a peak of roughly $18.92 billion. This fluctuation suggests volatility possibly due to external factors impacting the business environment in 2021 and a notable rebound thereafter.
- Property and Equipment, Net
- The net value of property and equipment steadily increased throughout the period under review. Starting at approximately $2.33 billion in 2017, this asset base grew consistently each year, reaching nearly $2.90 billion in 2022. The steady investment in fixed assets indicates ongoing capital expenditure and asset acquisition to support business operations and potential expansion.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio, which measures the efficiency of using fixed assets to generate sales, generally trended upwards from 5.53 in 2017 to around 6.05 in 2019, indicating improved asset utilization. It remained steady into 2020 but dropped sharply to 4.62 in 2021, coinciding with decreased sales. In 2022, the ratio rose significantly to 6.53, the highest in the reported period, reflecting enhanced efficiency and possibly better operational management or favorable market conditions.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Ross Stores Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Sales | |||||||
| Property and equipment, net | |||||||
| Operating lease assets | |||||||
| Property and equipment, net (including operating lease, right-of-use asset) | |||||||
| Long-term Activity Ratio | |||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | |||||||
| Benchmarks | |||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | |||||||
| Consumer Discretionary Distribution & Retail | |||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | |||||||
| Consumer Discretionary | |||||||
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).
1 2022 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Sales ÷ Property and equipment, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
- Sales Trend
- Sales exhibited a generally upward trajectory from 2017 to 2020, increasing from approximately 12.87 billion USD to 16.04 billion USD. However, in 2021, there was a significant decline to around 12.53 billion USD, followed by a strong rebound in 2022, reaching about 18.92 billion USD, the highest level in the period analyzed.
- Property and Equipment, Net
- The net value of property and equipment, including operating lease right-of-use assets, was relatively stable from 2017 through 2019, remaining in the 2.3 to 2.5 billion USD range. Beginning in 2020, the figure more than doubled to approximately 5.71 billion USD and remained steady around that level through 2022, indicating a significant investment or change in accounting related to property and equipment during this time.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio, which measures sales efficiency relative to fixed assets, increased slightly from 5.53 in 2017 to a peak of 6.05 in 2019, suggesting improving asset utilization. The ratio then sharply declined to 2.81 in 2020 and further to 2.16 in 2021, reflecting reduced sales relative to asset base amidst the growing asset value. In 2022, the ratio partially recovered to 3.19, indicating some improvement in sales generation per unit of fixed asset, though still below earlier years' levels.
- Overall Interpretation
- The period saw steady sales growth initially, disrupted notably in 2021, with a strong recovery thereafter. The marked increase in property and equipment net values starting in 2020 likely reflects either substantial capital expenditures or changes in lease accounting standards. Correspondingly, net fixed asset turnover declined sharply after 2019, adversely affected by the rapid growth in asset base not immediately translating to proportional sales growth. The partial recovery in turnover ratio in 2022 aligns with resumed sales expansion, yet efficiency remains below pre-2020 levels, suggesting the company is adjusting to its expanded asset base.
Total Asset Turnover
Ross Stores Inc., total asset turnover calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Sales | |||||||
| Total assets | |||||||
| Long-term Activity Ratio | |||||||
| Total asset turnover1 | |||||||
| Benchmarks | |||||||
| Total Asset Turnover, Competitors2 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
| Total Asset Turnover, Sector | |||||||
| Consumer Discretionary Distribution & Retail | |||||||
| Total Asset Turnover, Industry | |||||||
| Consumer Discretionary | |||||||
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).
1 2022 Calculation
Total asset turnover = Sales ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Sales Trend
- Sales exhibited a general upward trend from 2017 through 2020, increasing from approximately $12.87 billion to $16.04 billion. However, a decline occurred in 2021, with sales dropping to about $12.53 billion. This was followed by a significant rebound in 2022, with sales reaching approximately $18.92 billion, marking the highest value within the observed period.
- Total Assets Trend
- Total assets have steadily increased over the entire period, starting at around $5.31 billion in 2017 and rising to approximately $13.64 billion by 2022. Notably, there was an accelerated growth in asset base beginning in 2020, with assets nearly doubling from about $6.07 billion in 2019 to $9.35 billion in 2020 and continuing upward thereafter.
- Total Asset Turnover Ratio
- The total asset turnover ratio, which measures the efficiency of asset utilization to generate sales, remained relatively stable at approximately 2.42 to 2.47 from 2017 through 2019. Starting in 2020, this ratio declined sharply to 1.72 and dropped further to 0.99 in 2021, indicating a significant decrease in asset efficiency. In 2022, there was a partial recovery to 1.39, although the ratio remained well below earlier levels.
- Overall Analysis
- The simultaneous increase in total assets and the decline in total asset turnover ratio from 2020 to 2021 suggest that asset growth outpaced sales growth during this period, reducing the efficiency of asset utilization. The drop in sales in 2021 also contributed to this decline in turnover. The recovery observed in 2022, with a substantial increase in sales and a partial rebound in turnover ratio, suggests improved asset utilization efficiency, though not to pre-2020 levels. These trends may point to strategic investments or expansions made in recent years that have yet to fully translate into proportional sales growth.
Equity Turnover
Ross Stores Inc., equity turnover calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Sales | |||||||
| Stockholders’ equity | |||||||
| Long-term Activity Ratio | |||||||
| Equity turnover1 | |||||||
| Benchmarks | |||||||
| Equity Turnover, Competitors2 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
| TJX Cos. Inc. | |||||||
| Equity Turnover, Sector | |||||||
| Consumer Discretionary Distribution & Retail | |||||||
| Equity Turnover, Industry | |||||||
| Consumer Discretionary | |||||||
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).
1 2022 Calculation
Equity turnover = Sales ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Sales
- Sales exhibited an overall upward trend from 2017 through 2022, increasing from approximately 12.87 billion USD in 2017 to about 18.92 billion USD in 2022. Notably, there was a decline in 2021, where sales dropped to approximately 12.53 billion USD from the previous year’s 16.04 billion USD, before rebounding significantly in 2022. This pattern suggests some external or internal disruption in 2021, followed by recovery in the subsequent year.
- Stockholders’ Equity
- Stockholders’ equity steadily increased over the six-year period, rising from approximately 2.75 billion USD in 2017 to around 4.06 billion USD in 2022. The growth was consistent year-over-year, indicating a strengthening equity base and possibly retained earnings accumulation or capital infusion despite fluctuations in sales.
- Equity Turnover
- The equity turnover ratio, which measures the efficiency of using equity to generate sales, remained relatively stable around 4.6 from 2017 to 2020, with minor fluctuations. It declined noticeably to 3.81 in 2021, corresponding with the significant drop in sales that year, indicating reduced efficiency in utilizing equity to produce revenue. However, it improved again to 4.66 in 2022, paralleling the sales recovery, suggesting a return to more effective use of equity capital.