Total Asset Turnover
since 2005
Calculation
Steel Dynamics Inc., total asset turnover, long-term trends, calculation
| Total asset turnover | = | Net sales1 | ÷ | Total assets1 | |
|---|---|---|---|---|---|
| Dec 31, 2021 | 1.47 | = | 18,408,850) | ÷ | 12,531,234) |
| Dec 31, 2020 | 1.04 | = | 9,601,482) | ÷ | 9,265,562) |
| Dec 31, 2019 | 1.26 | = | 10,464,991) | ÷ | 8,275,765) |
| Dec 31, 2018 | 1.53 | = | 11,821,839) | ÷ | 7,703,563) |
| Dec 31, 2017 | 1.39 | = | 9,538,797) | ÷ | 6,855,732) |
| Dec 31, 2016 | 1.21 | = | 7,777,109) | ÷ | 6,423,732) |
| Dec 31, 2015 | 1.22 | = | 7,594,411) | ÷ | 6,202,082) |
| Dec 31, 2014 | 1.20 | = | 8,755,952) | ÷ | 7,311,027) |
| Dec 31, 2013 | 1.24 | = | 7,372,924) | ÷ | 5,933,006) |
| Dec 31, 2012 | 1.25 | = | 7,290,234) | ÷ | 5,815,416) |
| Dec 31, 2011 | 1.34 | = | 7,997,500) | ÷ | 5,979,226) |
| Dec 31, 2010 | 1.13 | = | 6,300,887) | ÷ | 5,589,934) |
| Dec 31, 2009 | 0.77 | = | 3,958,806) | ÷ | 5,129,872) |
| Dec 31, 2008 | 1.54 | = | 8,080,521) | ÷ | 5,253,577) |
| Dec 31, 2007 | 0.97 | = | 4,384,549) | ÷ | 4,519,453) |
| Dec 31, 2006 | 1.44 | = | 3,238,787) | ÷ | 2,247,017) |
| Dec 31, 2005 | 1.24 | = | 2,184,866) | ÷ | 1,757,687) |
Based on: 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), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$ in thousands
The total asset turnover ratio for the period between 2005 and 2021 exhibits significant volatility, reflecting the cyclical nature of the steel industry and the company's varying ability to generate revenue from its asset base. While net sales and total assets both grew substantially over the sixteen-year horizon, the efficiency of asset utilization fluctuated, characterized by sharp declines during economic downturns and strong recoveries during periods of industrial expansion.
- Cyclical Volatility and Economic Sensitivity
- A pronounced decline in asset efficiency is observed during the 2008-2009 period. The total asset turnover ratio dropped from a peak of 1.54 in 2008 to its lowest point of 0.77 in 2009. This contraction corresponds with a sharp reduction in net sales, which fell from approximately 8.1 billion to 4.0 billion, while the asset base remained relatively stagnant, indicating an underutilization of capacity during the global economic downturn.
- Stability and Gradual Recovery
- From 2010 to 2016, the turnover ratio stabilized, generally fluctuating between 1.20 and 1.34. During this phase, net sales remained relatively flat, ranging between 6.3 billion and 8.8 billion, while total assets showed a gradual upward trend. This suggests a period of consistent operational performance where revenue growth largely kept pace with incremental capital investments.
- Peak Efficiency and Recent Performance
- A period of increased operational efficiency occurred between 2017 and 2018, with the ratio climbing to 1.53. This peak was driven by a significant surge in net sales reaching 11.8 billion. After a temporary dip in 2020 to 1.04, a strong recovery is evident in 2021, where the ratio rose to 1.47. This most recent increase is particularly notable as it was achieved despite the total asset base reaching a historical high of 12.5 billion, driven by a substantial increase in net sales to 18.4 billion.
- Relationship Between Asset Expansion and Revenue
- Over the long term, total assets grew from 1.76 billion in 2005 to 12.53 billion in 2021. The fact that the turnover ratio ended the period at 1.47, compared to 1.24 at the start, indicates that the company has successfully scaled its revenue generation capabilities faster than its asset accumulation, resulting in an overall improvement in asset productivity over the analyzed timeframe.
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Comparison to Competitors
Steel Dynamics Inc., total asset turnover, long-term trends, comparison to competitors
| Steel Dynamics Inc. | Freeport-McMoRan Inc. | |
|---|---|---|
| Dec 31, 2021 | 1.47 | 0.48 |
| Dec 31, 2020 | 1.04 | 0.34 |
| Dec 31, 2019 | 1.26 | 0.35 |
| Dec 31, 2018 | 1.53 | 0.44 |
| Dec 31, 2017 | 1.39 | 0.44 |
| Dec 31, 2016 | 1.21 | 0.40 |
| Dec 31, 2015 | 1.22 | 0.34 |
| Dec 31, 2014 | 1.20 | 0.36 |
| Dec 31, 2013 | 1.24 | 0.33 |
| Dec 31, 2012 | 1.25 | 0.51 |
| Dec 31, 2011 | 1.34 | 0.65 |
| Dec 31, 2010 | 1.13 | 0.65 |
| Dec 31, 2009 | 0.77 | 0.58 |
| Dec 31, 2008 | 1.54 | 0.76 |
| Dec 31, 2007 | 0.97 | 0.42 |
| Dec 31, 2006 | 1.44 | 1.07 |
| Dec 31, 2005 | 1.24 | 0.75 |
Based on: 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), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Materials)
Steel Dynamics Inc., total asset turnover, long-term trends, comparison to industry (materials)
| Steel Dynamics Inc. | Materials | |
|---|---|---|
| Dec 31, 2021 | 1.47 | 0.49 |
| Dec 31, 2020 | 1.04 | 0.40 |
| Dec 31, 2019 | 1.26 | 0.41 |
| Dec 31, 2018 | 1.53 | 0.33 |
| Dec 31, 2017 | 1.39 | 0.55 |
| Dec 31, 2016 | 1.21 | 0.59 |
| Dec 31, 2015 | 1.22 | 0.54 |
| Dec 31, 2014 | 1.20 | 0.53 |
| Dec 31, 2013 | 1.24 | 0.48 |
| Dec 31, 2012 | 1.25 | 0.65 |
| Dec 31, 2011 | 1.34 | 0.76 |
| Dec 31, 2010 | 1.13 | 0.74 |
| Dec 31, 2009 | 0.77 | 0.70 |
| Dec 31, 2008 | 1.54 | 0.90 |
| Dec 31, 2007 | 0.97 | 0.58 |
| Dec 31, 2006 | 1.44 | 1.02 |
| Dec 31, 2005 | 1.24 | 0.93 |
Based on: 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), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).