Analysis of Long-term (Investment) Activity Ratios
Quarterly Data
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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- Income Statement
- Analysis of Solvency Ratios
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- Analysis of Reportable Segments
- Common Stock Valuation Ratios
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Long-term Activity Ratios (Summary)
Steel Dynamics Inc., long-term (investment) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
- Net Fixed Asset Turnover
-
The net fixed asset turnover ratio exhibited a downward trend from early 2018 through 2020. Starting at 3.68 in the first quarter of 2018, the ratio peaked slightly at 4.1 in the first quarter of 2019 but then steadily declined to its lowest point of 2.34 by the fourth quarter of 2020. From 2021 onwards, a marked recovery was observed; the ratio increased consistently each quarter, reaching 4.54 in the second quarter of 2022 before maintaining a relatively high level around 4.42 by the third quarter of 2022. This pattern suggests a period of decreasing efficiency in generating sales from fixed assets through 2020, followed by a strong recovery and improved asset utilization from 2021 onward.
- Total Asset Turnover
-
The total asset turnover displayed a modest but clear declining trend during 2018 and 2019, decreasing from 1.4 in the first quarter of 2018 to 1.26 by the fourth quarter of 2019. The decline continued into 2020, reaching a low of 1.04 in the last quarter of that year. Starting in early 2021, the ratio began to improve steadily, climbing from 1.04 in the first quarter to 1.62 by the third quarter of 2022. This upward trajectory indicates enhanced efficiency in using total assets to generate revenue in recent periods, reversing previous declines.
- Equity Turnover
-
The equity turnover ratio followed a similar pattern to total asset turnover. From a level of 2.82 in the first quarter of 2018, it rose slightly to 3.0 by the end of that year but subsequently decreased gradually to 2.21 by the fourth quarter of 2020. Beginning in 2021, the ratio increased consistently, reaching a peak of 2.93 by the first quarter of 2022, then experienced a slight decline to 2.85 by the third quarter of 2022. This trend points to a strengthening in the efficiency of equity usage to generate sales over the last two years, albeit with a minor recent softening.
Net Fixed Asset Turnover
Steel Dynamics Inc., net fixed asset turnover calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||
| Property, plant and equipment, net | |||||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||
| Net fixed asset turnover1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Net Fixed Asset Turnover, Competitors2 | |||||||||||||||||||||||||
| Freeport-McMoRan Inc. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q3 2022 Calculation
Net fixed asset turnover
= (Net salesQ3 2022
+ Net salesQ2 2022
+ Net salesQ1 2022
+ Net salesQ4 2021)
÷ Property, plant and equipment, net
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales demonstrated a fluctuating trend over the analyzed quarters. From the first quarter of 2018 to the end of 2019, net sales generally decreased from about 2.6 billion to approximately 2.35 billion US dollars, with some quarter-on-quarter variability. In 2020, sales initially dropped, reaching a low around the second quarter, likely influenced by external economic conditions, and then gradually recovered. From 2021 onward, net sales showed a strong upward momentum, peaking near 5.3 billion US dollars in the fourth quarter of 2021. In early 2022, net sales remained robust, reaching levels above 5.5 billion, though a slight decline was observed in the third quarter of 2022 compared to the preceding quarter.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment steadily increased throughout the entire period. Beginning at approximately 2.66 billion US dollars in early 2018, the figure showed consistent growth each quarter, reaching over 5.1 billion US dollars by the third quarter of 2022. This upward trend suggests ongoing investment in fixed assets and expansion of operational capacity over time.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio, which measures sales generated per unit of fixed assets, exhibited a declining trend from 2018 through 2020. It fell from around 3.68 in early 2018 to a low of approximately 2.34 by the end of 2020, indicating that fixed assets were generating less revenue per unit during this period. From 2021 forward, this ratio improved markedly, rising to over 4.2 by the middle of 2022, reflecting enhanced efficiency and better utilization of fixed assets. The ratio peaked at 4.54 in mid-2022, slightly decreasing afterward but maintaining a high level compared to previous years.
- Summary of Insights
- The data reveals a period of initial sales contraction alongside substantial investment in fixed assets, which led to reduced asset turnover efficiency through 2020. Subsequently, sales growth accelerated sharply, especially during 2021 and early 2022, improving asset utilization effectiveness as reflected in the rising fixed asset turnover ratio. The continued expansion in property, plant, and equipment combined with increased sales performance suggests a successful scaling of operations and improved capital productivity in the most recent quarters.
Total Asset Turnover
Steel Dynamics Inc., total asset turnover calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||
| Total asset turnover1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Total Asset Turnover, Competitors2 | |||||||||||||||||||||||||
| Freeport-McMoRan Inc. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q3 2022 Calculation
Total asset turnover
= (Net salesQ3 2022
+ Net salesQ2 2022
+ Net salesQ1 2022
+ Net salesQ4 2021)
÷ Total assets
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the financial performance over the observed periods reveals several notable trends in key metrics.
- Net Sales
- Net sales demonstrated a fluctuating but generally increasing trend over the time horizon. Initially, sales peaked in the third quarter of 2018, followed by a decline through the end of 2019 and the early part of 2020. From the first quarter of 2021 onward, there was a substantial and steady increase, reaching the highest levels in the second quarter of 2022 before showing a slight decrease in the third quarter of 2022. This pattern indicates a recovery and growth phase post the mid-2020 dip.
- Total Assets
- Total assets showed a consistent upward trajectory throughout all periods. The asset base expanded steadily from just under 7 billion USD in early 2018 to over 14 billion USD by the third quarter of 2022. This steady increase signifies ongoing investment and asset accumulation, which could support expansion and operational capacity enhancement.
- Total Asset Turnover
- The total asset turnover ratio, which measures the efficiency of asset utilization in generating sales, started relatively high at around 1.4 in early 2018 and peaked at 1.53 by the end of that year. It then experienced a decline through 2019 and into 2020, reaching its lowest point around 1.04 in late 2020 and early 2021. After this decline, there was a noticeable recovery in asset turnover, improving steadily to approximately 1.62 by the second and third quarters of 2022. This suggests that while asset accumulation was steady, there was a period of less efficient asset use which later improved significantly, possibly correlating with the rebound in sales.
Overall, the data reflects a phase of growth and expansion with increased asset investment, combined with fluctuating sales impacted by external conditions. The recovery in asset turnover ratio toward the end of the observed periods indicates improved operational efficiency relative to asset size, supporting stronger sales performance.
Equity Turnover
Steel Dynamics Inc., equity turnover calculation (quarterly data)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||
| Total Steel Dynamics, Inc. equity | |||||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||
| Equity turnover1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Equity Turnover, Competitors2 | |||||||||||||||||||||||||
| Freeport-McMoRan Inc. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q3 2022 Calculation
Equity turnover
= (Net salesQ3 2022
+ Net salesQ2 2022
+ Net salesQ1 2022
+ Net salesQ4 2021)
÷ Total Steel Dynamics, Inc. equity
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales
- The net sales exhibit notable fluctuations over the observed quarters. From March 2018 to December 2018, net sales experienced an increasing trend, reaching a peak in September 2018, followed by a decline towards the end of the year. The first half of 2019 showed a consistent decline in net sales, with the lowest figures observed by December 2019. Starting in 2020, the sales showed a recovery and upward trajectory, though with some volatility. The highest sales were recorded in the fourth quarter of 2021, after which there was a slight decrease but remained at relatively high levels compared to previous years through to the third quarter of 2022.
- Total Steel Dynamics, Inc. Equity
- Total equity steadily increased throughout the entire period under review. Beginning from approximately 3.47 billion USD at the start of 2018, equity showed gradual quarterly growth with no significant declines, reaching over 7.9 billion USD by the third quarter of 2022. This reflects sustained strengthening of the company's capital base and retained earnings or capital injections over time.
- Equity Turnover Ratio
- The equity turnover ratio, which indicates how effectively the company uses its equity to generate sales, showed a declining trend from early 2018 through 2020. Initially close to 2.8-3.0, it decreased to about 2.21 by December 2020. From 2021 onward, the ratio rebounded gradually, returning to approximately 2.85 by the third quarter of 2022. This pattern suggests that efficiency in leveraging equity for sales diminished during the mid-period but improved again more recently, though never reaching the initial 2018 levels.
- Overall Observations
- The data reveals that while net sales experienced variability with periods of decline and growth, equity consistently expanded, suggesting an accumulation of financial resources or reserves. The equity turnover ratio's decline alongside growing equity indicates that sales growth did not keep pace with the increase in equity during the mid-period but later improved. This may imply phases of investment or capital buildup for future expansion or market conditions influencing sales performance. The recent resurgence in net sales and equity turnover points to enhanced operational effectiveness or stronger market conditions in the latest quarters analyzed.