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.
Long-term Activity Ratios (Summary)
eBay Inc., long-term (investment) activity ratios (quarterly data)
Based on: 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), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
The net fixed asset turnover ratio exhibits a generally upward trend over the analyzed periods, increasing from a level of approximately 5.33 in early 2015 to around 7.16 by late 2019. This progression indicates improving efficiency in utilizing net fixed assets to generate revenue. It is noteworthy, however, that when including operating lease right-of-use assets, the trend diverges beginning in early 2019, where the ratio declines significantly from 6.73 to approximately 5.05 by the final quarter. This suggests that the inclusion of lease assets impacts the asset base and consequently the turnover ratio differently in recent periods.
Total asset turnover ratios reveal a fluctuating pattern with some volatility in earlier years, moving between 0.29 and 0.61 in 2015, before stabilizing around the 0.40 to 0.47 range through 2017 to 2018. In the most recent periods, there is a definite upward momentum, reaching 0.58 by the third quarter of 2019. This gradual improvement denotes enhanced effectiveness in the company's use of its entire asset base to generate sales.
Equity turnover demonstrates substantial variation across the quarters. Following an initial dip to 0.68 in the second quarter of 2015, it peaks dramatically at 1.72 in the third quarter of the same year, then experiences volatility through 2016 and early 2017. From mid-2017 onward, a sustained and robust upward trajectory is observed, culminating in a notable increase to 3.32 by the third quarter of 2019. This may reflect either an increase in sales relative to shareholder equity or changes in equity structure, pointing to a higher intensity of equity utilization for sales generation during this timeframe.
Overall, the data indicates that the company has generally enhanced its asset usage efficiency, particularly evident in the net fixed asset and total asset turnover ratios. However, the adjustment to accounting for operating lease rights-of-use assets introduces a contrasting effect on fixed asset efficiency metrics in the latest periods. The pronounced escalation in equity turnover ratios suggests significant changes in either capital structure or sales leverage relative to equity, which may warrant further investigation to understand the underlying drivers.
- Net Fixed Asset Turnover
- Shows improvement from 5.33 (Q1 2015) to 7.16 (Q3 2019), indicating better utilization of fixed assets over time.
- With operating lease right-of-use assets included, the ratio declines after Q4 2018, highlighting the impact of lease asset capitalization on turnover efficiency.
- Total Asset Turnover
- Exhibits early volatility but stabilizes and gradually improves from 0.35 in Q1 2015 to 0.58 in Q3 2019, reflecting more effective overall asset use.
- Equity Turnover
- Fluctuates widely in early years but shows a strong upward trend from mid-2017 onward, rising from 1.19 (Q4 2017) to 3.32 (Q3 2019), suggesting increased sales generated per unit of equity.
Net Fixed Asset Turnover
eBay Inc., net fixed asset turnover calculation (quarterly data)
| Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Net revenues | 2,649) | 2,687) | 2,643) | 2,877) | 2,649) | 2,640) | 2,580) | 2,613) | 2,409) | 2,328) | 2,217) | 2,395) | 2,217) | 2,230) | 2,137) | 2,322) | 2,099) | 2,110) | 2,061) | ||||||
| Property and equipment, net | 1,516) | 1,573) | 1,582) | 1,597) | 1,580) | 1,576) | 1,548) | 1,597) | 1,546) | 1,538) | 1,496) | 1,516) | 1,526) | 1,502) | 1,497) | 1,554) | 1,535) | 2,781) | 2,947) | ||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||
| Net fixed asset turnover1 | 7.16 | 6.90 | 6.83 | 6.73 | 6.63 | 6.50 | 6.41 | 5.99 | 6.05 | 5.95 | 6.06 | 5.92 | 5.84 | 5.85 | 5.79 | 5.53 | 7.29 | 4.83 | 5.33 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Net Fixed Asset Turnover, Competitors2 | |||||||||||||||||||||||||
| Amazon.com Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Home Depot Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Lowe’s Cos. Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| TJX Cos. Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 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), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q3 2019 Calculation
Net fixed asset turnover
= (Net revenuesQ3 2019
+ Net revenuesQ2 2019
+ Net revenuesQ1 2019
+ Net revenuesQ4 2018)
÷ Property and equipment, net
= (2,649 + 2,687 + 2,643 + 2,877)
÷ 1,516 = 7.16
2 Click competitor name to see calculations.
The financial data exhibits several notable trends in net revenues, property and equipment, and net fixed asset turnover over the periods analyzed.
- Net Revenues
-
Net revenues experienced fluctuations throughout the period, generally demonstrating a pattern of growth with some intermittent declines. Starting at 2,061 million US dollars in the first quarter of 2015, revenues showed a modest increase until the end of 2015, reaching 2,322 million US dollars. There was a slight dip in the first quarter of 2016, followed by continued recovery and growth into 2017 and 2018.
The highest quarterly revenue occurred in the fourth quarter of 2018, peaking at 2,877 million US dollars. Subsequently, revenues hovered around the 2,600–2,700 million range during 2019, indicating a stabilization after the peak, albeit without returning to the upper peak levels.
- Property and Equipment, Net
-
There is a marked decline in net property and equipment from early 2015 through late 2016. Beginning at 2,947 million US dollars at the first quarter of 2015, the balance decreased substantially to approximately 1,516 million US dollars by the end of 2016. This reflects a significant reduction of nearly 50% over two years.
From 2017 onwards, net property and equipment stabilized and fluctuated within a narrow range around 1,500 to 1,600 million US dollars, with a slight declining tendency noted towards the end of 2019, reaching approximately 1,516 million US dollars once again.
- Net Fixed Asset Turnover
-
The net fixed asset turnover ratio exhibited a positive and consistent growth trend over the entire timeline. Starting from a ratio of 5.33 in the first quarter of 2015, the ratio showed some volatility during 2015 but generally increased steadily from 2016 onwards.
This ratio progressively improved, reaching a peak value of 7.16 by the third quarter of 2019. The upward trend indicates an enhanced efficiency in utilizing fixed assets to generate revenue, especially notable given the reduction and subsequent stabilization of net property and equipment.
In summary, the data reflects a strategic reduction in property and equipment assets during the early part of the analyzed period, which correlates with a rising net fixed asset turnover ratio, suggesting improved asset utilization efficiency. Net revenues generally increased over time with some fluctuations, peaking at the end of 2018 before stabilizing at a high level. These patterns could indicate efforts to optimize asset base while simultaneously growing the revenue base, thereby enhancing overall operational efficiency.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
eBay Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation (quarterly data)
| Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Net revenues | 2,649) | 2,687) | 2,643) | 2,877) | 2,649) | 2,640) | 2,580) | 2,613) | 2,409) | 2,328) | 2,217) | 2,395) | 2,217) | 2,230) | 2,137) | 2,322) | 2,099) | 2,110) | 2,061) | ||||||
| Property and equipment, net | 1,516) | 1,573) | 1,582) | 1,597) | 1,580) | 1,576) | 1,548) | 1,597) | 1,546) | 1,538) | 1,496) | 1,516) | 1,526) | 1,502) | 1,497) | 1,554) | 1,535) | 2,781) | 2,947) | ||||||
| Operating lease right-of-use assets | 634) | 670) | 696) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Property and equipment, net (including operating lease, right-of-use asset) | 2,150) | 2,243) | 2,278) | 1,597) | 1,580) | 1,576) | 1,548) | 1,597) | 1,546) | 1,538) | 1,496) | 1,516) | 1,526) | 1,502) | 1,497) | 1,554) | 1,535) | 2,781) | 2,947) | ||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 5.05 | 4.84 | 4.74 | 6.73 | 6.63 | 6.50 | 6.41 | 5.99 | 6.05 | 5.95 | 6.06 | 5.92 | 5.84 | 5.85 | 5.79 | 5.53 | 7.29 | 4.83 | 5.33 | ||||||
| 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. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 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), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q3 2019 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset)
= (Net revenuesQ3 2019
+ Net revenuesQ2 2019
+ Net revenuesQ1 2019
+ Net revenuesQ4 2018)
÷ Property and equipment, net (including operating lease, right-of-use asset)
= (2,649 + 2,687 + 2,643 + 2,877)
÷ 2,150 = 5.05
2 Click competitor name to see calculations.
- Net Revenues
- Net revenues exhibited a generally positive trend over the analyzed periods. From March 2015 to December 2018, revenues increased from $2,061 million to $2,877 million, demonstrating consistent growth with occasional quarter-to-quarter fluctuations. The revenue maintained levels above $2,500 million after early 2018, peaking in December 2018. However, in 2019, revenues showed signs of stabilization with values fluctuating slightly around the $2,600 million mark, indicating a potential plateau or moderation in growth rate.
- Property and Equipment, Net (Including Operating Lease, Right-of-Use Asset)
- The net value of property and equipment experienced an atypical pattern. Initially, there was a steady decline from $2,947 million in March 2015 to about $1,516 million by the end of 2015 and through 2016, indicating possible asset disposals or reclassifications. From 2017 through 2018, values remained relatively stable in the $1,500-$1,600 million range. Notably, there was a sharp increase beginning in March 2019, reaching over $2,200 million by September 2019, suggesting significant acquisitions or capital investments in property and equipment during that time frame.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- This ratio showed variability throughout the periods, reflecting changes in efficiency of asset utilization. Initially decreasing from 5.33 in March 2015 to a low of 4.83 in June 2015, it then rose significantly to a peak of 7.29 in September 2015, indicating improved turnover possibly due to reduced asset base or increased revenues. From late 2015 through 2018, the turnover ratio generally stayed within the range of approximately 5.5 to 6.7, representing stable asset utilization efficiency. However, in 2019, the ratio dropped notably to values below 5.1, concurrent with the increase in net fixed assets, implying that asset growth outpaced revenue generation in that period and thus reduced turnover efficiency.
- Summary
- Overall, the data reflects a company experiencing revenue growth from 2015 through 2018, stabilizing in 2019. Property and equipment net asset values decreased initially but saw a substantial increase in 2019, which inversely affected net fixed asset turnover ratios due to the larger asset base not being matched proportionally by revenue increases. The shifts suggest strategic investment in assets in 2019, potentially for future growth, but with a short-term impact on asset efficiency metrics.
Total Asset Turnover
eBay Inc., total asset turnover calculation (quarterly data)
| Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Net revenues | 2,649) | 2,687) | 2,643) | 2,877) | 2,649) | 2,640) | 2,580) | 2,613) | 2,409) | 2,328) | 2,217) | 2,395) | 2,217) | 2,230) | 2,137) | 2,322) | 2,099) | 2,110) | 2,061) | ||||||
| Total assets | 18,714) | 21,169) | 22,329) | 22,819) | 23,652) | 23,988) | 24,555) | 25,981) | 25,943) | 27,483) | 24,808) | 23,847) | 20,502) | 19,993) | 19,608) | 17,785) | 18,338) | 45,658) | 44,841) | ||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||
| Total asset turnover1 | 0.58 | 0.51 | 0.48 | 0.47 | 0.44 | 0.43 | 0.40 | 0.37 | 0.36 | 0.33 | 0.37 | 0.38 | 0.43 | 0.44 | 0.44 | 0.48 | 0.61 | 0.29 | 0.35 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Total Asset Turnover, Competitors2 | |||||||||||||||||||||||||
| Amazon.com Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Home Depot Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Lowe’s Cos. Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| TJX Cos. Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 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), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q3 2019 Calculation
Total asset turnover
= (Net revenuesQ3 2019
+ Net revenuesQ2 2019
+ Net revenuesQ1 2019
+ Net revenuesQ4 2018)
÷ Total assets
= (2,649 + 2,687 + 2,643 + 2,877)
÷ 18,714 = 0.58
2 Click competitor name to see calculations.
- Net Revenues
- The net revenues exhibited a generally increasing trend over the analyzed quarters, starting at 2,061 million US dollars in the first quarter of 2015 and reaching a peak of 2,877 million US dollars in the fourth quarter of 2018. Some fluctuations are observed within yearly cycles, with typical seasonal increases in the fourth quarters. After peaking in late 2018, revenues slightly declined in 2019, maintaining a range between approximately 2,640 and 2,687 million US dollars.
- Total Assets
- Total assets demonstrated significant volatility during the period. A notable decline occurred from the first quarter of 2015 (44,841 million US dollars) to the fourth quarter of 2015 (17,785 million US dollars), implying a substantial reduction in assets possibly due to a reclassification, divestiture, or an accounting adjustment. Following this sharp decrease, total assets stabilized and exhibited a gradual downward trend from 24,555 million US dollars in the first quarter of 2018 to 18,714 million US dollars by the third quarter of 2019.
- Total Asset Turnover
- The total asset turnover ratio, which measures the efficiency of assets in generating revenue, showed variability across the quarters. Early data from 2015 reflects moderate ratios around 0.3 to 0.6; however, post-2015 data indicates a consistent upward trend from 0.37 in the first quarter of 2017 to 0.58 in the third quarter of 2019. This increase suggests improving asset utilization efficiency over time, meaning the company generated more revenue per unit of asset in the later periods compared to earlier ones.
- Insights and Overall Assessment
- The observed pattern indicates that over the period, the company improved its capability to generate revenues relative to its asset base, as shown by the rising total asset turnover ratio despite a decline in total assets. The initial sharp drop in total assets around 2015 may reflect significant structural changes. The generally rising net revenue trend, with some seasonal peaks, combined with greater efficiency in asset utilization, points towards effective operational management in recent years. However, the slight slowdown in revenue growth during 2019 could warrant further monitoring to evaluate if it develops into a longer-term trend.
Equity Turnover
eBay Inc., equity turnover calculation (quarterly data)
| Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Net revenues | 2,649) | 2,687) | 2,643) | 2,877) | 2,649) | 2,640) | 2,580) | 2,613) | 2,409) | 2,328) | 2,217) | 2,395) | 2,217) | 2,230) | 2,137) | 2,322) | 2,099) | 2,110) | 2,061) | ||||||
| Stockholders’ equity | 3,270) | 4,106) | 5,203) | 6,281) | 6,929) | 7,146) | 7,596) | 8,063) | 11,283) | 11,474) | 11,595) | 10,539) | 6,819) | 6,453) | 6,317) | 6,576) | 6,492) | 19,805) | 19,538) | ||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||
| Equity turnover1 | 3.32 | 2.64 | 2.08 | 1.71 | 1.51 | 1.43 | 1.31 | 1.19 | 0.83 | 0.80 | 0.78 | 0.85 | 1.31 | 1.36 | 1.37 | 1.31 | 1.72 | 0.68 | 0.80 | ||||||
| Benchmarks | |||||||||||||||||||||||||
| Equity Turnover, Competitors2 | |||||||||||||||||||||||||
| Amazon.com Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Home Depot Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Lowe’s Cos. Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| TJX Cos. Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 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), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q3 2019 Calculation
Equity turnover
= (Net revenuesQ3 2019
+ Net revenuesQ2 2019
+ Net revenuesQ1 2019
+ Net revenuesQ4 2018)
÷ Stockholders’ equity
= (2,649 + 2,687 + 2,643 + 2,877)
÷ 3,270 = 3.32
2 Click competitor name to see calculations.
- Net Revenues
- The net revenues demonstrated moderate fluctuations over the observed periods. Starting at $2,061 million in the first quarter of 2015, revenues generally increased, reaching a peak of $2,877 million in the last quarter of 2018. Despite some short-term decreases, revenues remained above the $2,000 million mark throughout the entire timeline. There is a notable upward trend from 2017 onwards, indicating steady growth in revenue. The data shows that the company managed to incrementally grow its sales base or pricing power over the four-year span.
- Stockholders’ Equity
- Stockholders’ equity displays significant variability with a clear downward trend overall. It began at $19,538 million in early 2015, then abruptly dropped to around $6,500 million by the end of 2015, suggesting a possible restructuring, share repurchase, dividend payments, or reclassification. After this point, equity fluctuated between approximately $6,000 and $11,500 million until early 2017 before entering a persistent decline from mid-2017 forward, reducing steadily to $3,270 million by the third quarter of 2019. This decline in equity could reflect ongoing capital returns to shareholders or operational challenges affecting retained earnings.
- Equity Turnover Ratio
- The equity turnover ratio, defined as net revenues divided by average stockholders' equity, shows a pronounced increasing trend. Initially low at about 0.8 in early 2015, it spiked sharply during 2015 to over 1.7, then stabilized around 1.3 until late 2016. From 2017 onward, the ratio climbed significantly from 0.78 to 3.32 by the third quarter of 2019. This rising trend largely corresponds with the declining equity base combined with modest revenue growth, indicating that the company is generating more revenue per unit of shareholder equity. While this can reflect improved operating efficiency or higher financial leverage, the steep rise also raises questions about the sustainability of such leverage and the underlying equity reductions.
- Overall Insights
- The data reveals a business with stable to growing revenues but decreasing equity, leading to increased equity turnover. The reduction in stockholders' equity suggests strategic capital management decisions, such as buybacks or dividend distributions, or perhaps losses and impairments. The increasing equity turnover indicates the company is leveraging its equity base more intensively to support revenue. It would be prudent to investigate the causes of equity decline to assess financial stability. The revenue growth trend is positive but not rapid, implying that efficiency improvements and capital management might be the primary drivers of financial performance gains during this period.