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)
Shockwave Medical Inc., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2023-12-31), 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).
An analysis of long-term activity ratios reveals a general trajectory of increasing efficiency in the utilization of fixed assets and equity, although total asset productivity experienced a notable decline in the most recent period.
- Net Fixed Asset Turnover
- A period of volatility is observed initially, with a significant decrease from 8.74 in 2019 to 4.14 in 2020. However, a strong recovery followed, with the ratio climbing consistently to reach 10.59 by 2023. This suggests a substantial improvement in the ability to generate revenue from net fixed assets over the long term.
- Net Fixed Asset Turnover including Operating Leases
- The inclusion of right-of-use assets presents a more stable upward trend. After a slight dip in 2020 to 2.83, the ratio increased steadily every subsequent year, ending at 7.40 in 2023. This indicates that the efficiency of the entire long-term operational infrastructure, including leased assets, has improved consistently.
- Total Asset Turnover
- A growth phase is evident between 2019 and 2022, where the ratio rose from 0.19 to a peak of 0.76. This trend reversed in 2023, with the ratio falling to 0.47. This divergence suggests that while fixed asset efficiency improved, the overall asset base expanded at a rate that exceeded revenue growth in the final year.
- Equity Turnover
- A consistent and strong upward trend is observed in equity utilization. The ratio expanded from 0.22 in 2019 to 1.09 in 2023, with the most significant jump occurring between 2020 and 2021. This reflects an increasing capacity to generate sales relative to the shareholders' equity invested in the business.
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Net Fixed Asset Turnover
Shockwave Medical Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | 730,230) | 489,733) | 237,146) | 67,789) | 42,927) | |
| Property and equipment, net | 68,923) | 48,152) | 24,361) | 16,362) | 4,910) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 10.59 | 10.17 | 9.73 | 4.14 | 8.74 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Abbott Laboratories | 3.95 | 4.76 | 4.81 | — | — | |
| Elevance Health Inc. | 39.05 | 36.07 | 34.94 | — | — | |
| Intuitive Surgical Inc. | 2.01 | 2.62 | 3.04 | — | — | |
| Medtronic PLC | 5.61 | 5.85 | 5.77 | — | — | |
| UnitedHealth Group Inc. | 32.10 | 31.81 | 31.81 | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Health Care Equipment & Services | 17.57 | 17.82 | 17.31 | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Health Care | 7.22 | 7.88 | 7.74 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 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).
1 2023 Calculation
Net fixed asset turnover = Revenue ÷ Property and equipment, net
= 730,230 ÷ 68,923 = 10.59
2 Click competitor name to see calculations.
Between 2019 and 2023, a significant expansion in both top-line revenue and the net fixed asset base was observed. While both metrics grew substantially, the relationship between them shifted, resulting in a marked increase in asset productivity following a period of initial volatility.
- Revenue and Fixed Asset Scaling
- Revenue grew from US$ 42.9 million in 2019 to US$ 730.2 million by 2023. Concurrently, net property and equipment increased from US$ 4.9 million to US$ 68.9 million. This indicates a strategic scaling of operational capacity to support rapid growth in sales.
- Analysis of Asset Turnover Volatility
- The net fixed asset turnover ratio experienced a sharp decline in 2020, falling from 8.74 to 4.14. This downturn was driven by a substantial increase in net property and equipment that outpaced revenue growth during that specific fiscal year, suggesting a phase of front-loaded capital investment in infrastructure.
- Long-term Efficiency Trends
- From 2021 through 2023, the net fixed asset turnover ratio demonstrated a consistent upward trajectory, rising from 9.73 to 10.59. This pattern indicates that the investments made in fixed assets were successfully leveraged to drive exponential revenue growth, resulting in improved asset utilization and higher operational efficiency.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Shockwave Medical Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | 730,230) | 489,733) | 237,146) | 67,789) | 42,927) | |
| Property and equipment, net | 68,923) | 48,152) | 24,361) | 16,362) | 4,910) | |
| Operating lease right-of-use assets | 29,707) | 32,365) | 27,496) | 7,568) | 8,825) | |
| Property and equipment, net (including operating lease, right-of-use asset) | 98,630) | 80,517) | 51,857) | 23,930) | 13,735) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 7.40 | 6.08 | 4.57 | 2.83 | 3.13 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Abbott Laboratories | 3.56 | 4.25 | 4.26 | — | — | |
| Elevance Health Inc. | 34.43 | 31.64 | 30.12 | — | — | |
| Intuitive Surgical Inc. | 1.97 | 2.53 | 2.93 | — | — | |
| Medtronic PLC | 4.72 | 5.06 | 4.84 | — | — | |
| UnitedHealth Group Inc. | 22.48 | 21.54 | 21.54 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Health Care Equipment & Services | 14.40 | 14.39 | 13.89 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Health Care | 6.36 | 6.90 | 6.75 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 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).
1 2023 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenue ÷ Property and equipment, net (including operating lease, right-of-use asset)
= 730,230 ÷ 98,630 = 7.40
2 Click competitor name to see calculations.
A period of aggressive revenue growth is observed from 2019 to 2023, with total revenue increasing from 42,927 thousand US$ to 730,230 thousand US$. During this same interval, investments in net property and equipment, including right-of-use assets, expanded from 13,735 thousand US$ to 98,630 thousand US$. While the asset base grew steadily, the rate of revenue acceleration significantly exceeded the pace of capital expenditure.
- Net Fixed Asset Turnover Trend
- The net fixed asset turnover ratio experienced a minor contraction between 2019 and 2020, moving from 3.13 to 2.83. Following this period, the ratio entered a phase of consistent growth, rising to 4.57 in 2021, 6.08 in 2022, and peaking at 7.40 in 2023.
- Operational Efficiency and Scalability
- The sharp upward trajectory of the turnover ratio since 2021 indicates a substantial increase in asset productivity. The company has successfully scaled its revenue streams without requiring a proportional increase in fixed asset investment, suggesting a highly scalable business model and optimized utilization of its physical and leased infrastructure.
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Total Asset Turnover
Shockwave Medical Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | 730,230) | 489,733) | 237,146) | 67,789) | 42,927) | |
| Total assets | 1,566,563) | 646,089) | 345,682) | 272,042) | 231,938) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.47 | 0.76 | 0.69 | 0.25 | 0.19 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Abbott Laboratories | 0.55 | 0.59 | 0.57 | — | — | |
| Elevance Health Inc. | 1.56 | 1.51 | 1.41 | — | — | |
| Intuitive Surgical Inc. | 0.46 | 0.48 | 0.42 | — | — | |
| Medtronic PLC | 0.34 | 0.35 | 0.32 | — | — | |
| UnitedHealth Group Inc. | 1.34 | 1.31 | 1.34 | — | — | |
| Total Asset Turnover, Sector | ||||||
| Health Care Equipment & Services | 1.10 | 1.06 | 1.02 | — | — | |
| Total Asset Turnover, Industry | ||||||
| Health Care | 0.63 | 0.66 | 0.62 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 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).
1 2023 Calculation
Total asset turnover = Revenue ÷ Total assets
= 730,230 ÷ 1,566,563 = 0.47
2 Click competitor name to see calculations.
The total asset turnover ratio exhibited a notable upward trend from 2019 through 2022, followed by a decline in the most recent period. This indicates a changing relationship between revenue generated and the assets employed to produce that revenue.
- Total Asset Turnover Trend
- In 2019, the total asset turnover ratio was 0.19. This increased to 0.25 in 2020, suggesting improved asset utilization. A significant jump to 0.69 was observed in 2021, indicating a substantial increase in revenue generated per dollar of assets. The ratio continued to rise, reaching 0.76 in 2022, representing the peak value within the observed period. However, in 2023, the ratio decreased to 0.47, signaling a less efficient utilization of assets compared to the prior year.
The substantial increase in the ratio from 2020 to 2021 and 2022 aligns with the significant growth in revenue during those years. The decrease in 2023, despite continued revenue growth, suggests that asset growth outpaced revenue growth. This could be due to investments in new assets that have not yet fully contributed to revenue generation, or an increase in working capital requirements.
- Revenue and Asset Relationship
- The company demonstrated increasing efficiency in converting its assets into revenue from 2019 to 2022. However, the 2023 figures indicate a potential shift in this dynamic. While revenue continued to increase, the rate of asset accumulation was higher, resulting in a lower turnover ratio. This warrants further investigation to determine the nature of the asset investments and their expected impact on future revenue.
The observed decline in the total asset turnover ratio in 2023 should be monitored in subsequent periods to assess whether it represents a temporary fluctuation or a sustained trend. Continued monitoring will provide insights into the company’s ability to effectively manage its assets and generate revenue.
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Equity Turnover
Shockwave Medical Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | 730,230) | 489,733) | 237,146) | 67,789) | 42,927) | |
| Stockholders’ equity | 668,677) | 511,316) | 241,830) | 225,654) | 192,653) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 1.09 | 0.96 | 0.98 | 0.30 | 0.22 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Abbott Laboratories | 1.04 | 1.19 | 1.20 | — | — | |
| Elevance Health Inc. | 4.33 | 4.29 | 3.80 | — | — | |
| Intuitive Surgical Inc. | 0.54 | 0.56 | 0.48 | — | — | |
| Medtronic PLC | 0.61 | 0.60 | 0.59 | — | — | |
| UnitedHealth Group Inc. | 4.14 | 4.14 | 3.98 | — | — | |
| Equity Turnover, Sector | ||||||
| Health Care Equipment & Services | 2.66 | 2.61 | 2.42 | — | — | |
| Equity Turnover, Industry | ||||||
| Health Care | 1.69 | 1.69 | 1.67 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 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).
1 2023 Calculation
Equity turnover = Revenue ÷ Stockholders’ equity
= 730,230 ÷ 668,677 = 1.09
2 Click competitor name to see calculations.
Analysis of the financial trajectory from 2019 to 2023 indicates a period of aggressive scaling and substantial improvement in capital efficiency. The alignment of revenue growth and equity expansion reflects an increasing capacity to generate sales from the company's net assets.
- Revenue Trajectory
- Revenue experienced exponential growth over the five-year period, rising from 42,927 thousand US$ in 2019 to 730,230 thousand US$ by 2023. A particularly sharp increase occurred between 2020 and 2021, where revenue more than tripled, signaling a significant expansion in market penetration or product adoption.
- Equity Base Expansion
- Stockholders' equity grew from 192,653 thousand US$ in 2019 to 668,677 thousand US$ in 2023. While the increase was gradual between 2019 and 2021, a substantial rise was recorded in 2022 and 2023, indicating a strengthening of the financial position and an increase in the capital base available to support operations.
- Equity Turnover Analysis
- The equity turnover ratio demonstrates a strong upward trend, increasing from 0.22 in 2019 to 1.09 in 2023. The most notable transition occurred in 2021, where the ratio jumped to 0.98, reflecting a shift toward much higher efficiency in utilizing equity to drive sales. The slight stabilization in 2022 at 0.96, followed by a further increase to 1.09 in 2023, suggests that revenue growth is consistently outpacing the growth of the equity base, enhancing the operational productivity of the invested capital.
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