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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Albemarle Corp. pages available for free this week:
- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Dividend Discount Model (DDM)
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
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Long-term Activity Ratios (Summary)
Albemarle Corp., long-term (investment) activity ratios
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 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), 10-K (reporting date: 2018-12-31).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibited a declining trend from 1.12 in 2018 to 0.56 in 2021, indicating a consistent decrease in revenue generated per unit of fixed asset during these years. However, there was a notable recovery in 2022, where the ratio increased to 1.05, approaching the 2018 level. A similar pattern was observed when including operating lease right-of-use assets, suggesting the adjustment for leases did not materially change the overall trend.
- Total Asset Turnover
- The total asset turnover ratio showed a downward trajectory from 0.45 in 2018 to 0.30 in 2020 and 2021, reflecting reduced efficiency in utilizing total assets to generate revenues over this period. This was followed by a sharp improvement in 2022, increasing to 0.47, surpassing the initial 2018 value. This rebound indicates enhanced asset utilization in the most recent year after several years of decline.
- Equity Turnover
- Equity turnover decreased steadily from 0.94 in 2018 to a low of 0.59 in 2021, evidencing a reduction in revenue generated per unit of equity. In 2022, the ratio increased substantially to 0.92, nearly returning to its 2018 level. This pattern suggests a trend of diminished efficiency in using equity to generate sales during the middle years, followed by a significant recovery in the latest period.
Net Fixed Asset Turnover
Albemarle Corp., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | ||||||
| Net property, plant and equipment | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Linde plc | ||||||
| Sherwin-Williams Co. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Chemicals | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Materials | ||||||
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Net fixed asset turnover = Net sales ÷ Net property, plant and equipment
= ÷ =
2 Click competitor name to see calculations.
The financial data shows various trends over a five-year period. Net sales exhibit an overall upward trajectory, with a slight decline during 2020 and 2021, followed by a substantial increase in 2022. This sudden rise in 2022 suggests a strong recovery or expansion in sales activities compared to prior years.
The net property, plant, and equipment values have consistently increased every year, indicating significant investment in long-term assets. This steady growth suggests ongoing capital expenditure aimed at enhancing production capacity or operational capabilities.
The net fixed asset turnover ratio demonstrates a declining trend from 2018 to 2021, reflecting a decrease in sales generated per unit of fixed assets. However, in 2022, there is a notable improvement in this ratio, approaching the initial level recorded in 2018. This improvement suggests enhanced utilization of fixed assets to generate sales after a period of lower efficiency.
- Net Sales
- Overall increase with a dip in 2020 and 2021; sharp rise in 2022 indicates strong sales growth.
- Net Property, Plant, and Equipment
- Consistent year-over-year increase, reflecting continual investment in long-term assets.
- Net Fixed Asset Turnover
- Decline from 2018 to 2021 indicating less efficient asset use; significant recovery in 2022 suggesting improved asset utilization.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Albemarle Corp., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | ||||||
| Net property, plant and equipment | ||||||
| Operating lease right-of-use assets | ||||||
| Net property, plant and equipment (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 | ||||||
| Linde plc | ||||||
| Sherwin-Williams Co. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Chemicals | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Materials | ||||||
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Net sales ÷ Net property, plant and equipment (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- The net sales showed a modest upward trend from 2018 through 2019, increasing from approximately 3.37 billion USD to 3.59 billion USD. However, in 2020, net sales declined to about 3.13 billion USD, followed by a slight recovery in 2021 to around 3.33 billion USD. Notably, there was a significant surge in 2022, with net sales more than doubling to approximately 7.32 billion USD, indicating substantial growth or an expansion in business activities during that year.
- Net Property, Plant and Equipment (PP&E)
- The net property, plant, and equipment, including operating lease right-of-use assets, exhibited a consistent and significant increase each year from 2018 to 2022. Starting at about 3.02 billion USD in 2018, the figure rose sharply to over 5 billion USD in 2019, then continued to grow steadily each subsequent year, reaching approximately 7.09 billion USD by the end of 2022. This pattern suggests considerable investment in physical assets and possibly expansion of operational capacity.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio demonstrated a declining trend from 2018 through 2021, beginning at 1.12 in 2018 and dropping to 0.55 in 2021. This decline indicates that the efficiency in generating sales from fixed assets decreased over these years. However, in 2022, the ratio rebounded to 1.03, nearly returning to the 2018 level, suggesting improved utilization of fixed assets or better sales generation relative to asset size in that year.
- Overall Analysis
- The data reflects a period of substantial investment in fixed assets over the five years, with steady growth in the asset base. Initially, the efficiency of these assets in generating sales decreased, as shown by the declining net fixed asset turnover ratio through 2021. Despite this, the large increase in net sales in 2022, along with the concurrent improvement in asset turnover, indicates that the investments in property, plant, and equipment may have started to yield returns with enhanced operational efficiency and revenue growth in the latest year reported.
Total Asset Turnover
Albemarle Corp., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Linde plc | ||||||
| Sherwin-Williams Co. | ||||||
| Total Asset Turnover, Sector | ||||||
| Chemicals | ||||||
| Total Asset Turnover, Industry | ||||||
| Materials | ||||||
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Total asset turnover = Net sales ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales demonstrated a relatively stable pattern from 2018 through 2021, fluctuating within a range of approximately 3.1 billion to 3.6 billion US dollars. A significant increase was observed in 2022, with net sales more than doubling to over 7.3 billion US dollars, indicating a substantial growth in revenue during the most recent period.
- Total Assets
- Total assets showed a consistent upward trend over the five-year period. Starting at approximately 7.6 billion US dollars in 2018, total assets rose steadily each year, reaching about 15.5 billion US dollars by the end of 2022. This more than doubling of asset base suggests considerable investment or expansion activities.
- Total Asset Turnover
- Total asset turnover, which measures the efficiency of asset use to generate sales, declined from 0.45 in 2018 to 0.3 by 2020 and remained flat through 2021. However, in 2022, this ratio increased markedly to 0.47, surpassing the initial value of 2018. The rise in 2022 indicates improved efficiency in utilizing assets to produce sales, aligned with the substantial rise in net sales during the same period.
- Overall Insights
- The data reveals a phase of relatively stable sales combined with steady asset growth from 2018 to 2021, accompanied by decreasing asset efficiency. In 2022, a notable shift occurred, with net sales experiencing significant growth alongside a continued increase in total assets and a restitution in asset turnover efficiency. This pattern suggests a period of expansion or strategic change leading to enhanced operational performance and higher productivity of assets in recent times.
Equity Turnover
Albemarle Corp., equity turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | ||||||
| Total Albemarle Corporation shareholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Linde plc | ||||||
| Sherwin-Williams Co. | ||||||
| Equity Turnover, Sector | ||||||
| Chemicals | ||||||
| Equity Turnover, Industry | ||||||
| Materials | ||||||
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Equity turnover = Net sales ÷ Total Albemarle Corporation shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales showed a moderate increase from 2018 to 2019, rising from approximately 3.37 billion US dollars to about 3.59 billion US dollars. However, in 2020, net sales declined to roughly 3.13 billion US dollars, reflecting a reduction in revenue. The following year, 2021, saw a slight recovery to 3.33 billion US dollars. A significant surge occurred in 2022, with net sales more than doubling year-over-year to approximately 7.32 billion US dollars, indicating substantial growth and possibly an expansion in market demand or successful business initiatives.
- Total Shareholders’ Equity
- The total shareholders’ equity consistently increased throughout the analyzed period. Starting at about 3.59 billion US dollars in 2018, it grew steadily to around 3.93 billion in 2019 and 4.27 billion in 2020. In 2021, equity rose more sharply to approximately 5.63 billion US dollars, followed by an even more pronounced increase to nearly 8.00 billion US dollars in 2022. This upward trend suggests strengthening financial position and retained earnings accumulation over the years.
- Equity Turnover Ratio
- The equity turnover ratio, which measures the efficiency in generating sales from shareholders' equity, showed a declining trend from 0.94 in 2018 to 0.91 in 2019, then dropping more substantially to 0.73 in 2020 and reaching a low of 0.59 in 2021. This decline indicates reduced efficiency in utilizing equity to produce sales during these years. However, in 2022, the ratio rebounded to 0.92, nearly recovering to the earlier levels seen at the beginning of the period, likely influenced by the sharp increase in net sales that year relative to the equity base.