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)
Amphenol Corp., 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).
The investment activity ratios indicate a general trend of improving asset efficiency between 2019 and 2022, followed by a moderate decline across all metrics in 2023. This pattern suggests a period of intensified asset utilization that peaked in 2022 before returning toward historical norms.
- Fixed Asset Utilization
- Net fixed asset turnover experienced a steady increase from 8.23 in 2019 to a peak of 10.48 in 2022, reflecting enhanced efficiency in generating revenue from fixed investments. When accounting for right-of-use assets from operating leases, the ratio followed an identical trajectory, rising from 6.88 in 2019 to 8.45 in 2022. In 2023, both metrics saw a reduction, with net fixed asset turnover falling to 9.55 and the lease-inclusive ratio dropping to 7.77, indicating a decrease in the revenue generated per unit of fixed asset.
- Total Asset Efficiency
- Total asset turnover remained relatively stable over the five-year period, oscillating between a low of 0.70 in 2020 and a high of 0.82 in 2022. The return to 0.76 in 2023 matches the level recorded in 2019, suggesting that the overall efficiency of the company's entire asset base has remained consistent over the long term despite intermediate fluctuations.
- Equity Productivity
- Equity turnover exhibited more volatility than asset-based ratios. After a dip to 1.60 in 2020, the ratio recovered to 1.80 by 2022. However, a significant decline is observed in 2023, where the ratio dropped to 1.50, the lowest point in the analyzed period. This downward shift suggests a decrease in the efficiency of shareholder equity in driving sales, potentially due to an increase in retained earnings or new equity infusions that outpaced revenue growth.
Overall, the convergence of declining turnover ratios in 2023 across fixed assets, total assets, and equity suggests a synchronization in the slowing of asset productivity or a strategic expansion of the balance sheet that has not yet been fully leveraged for increased revenue.
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Net Fixed Asset Turnover
Amphenol Corp., 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) | ||||||
| Net sales | 12,554,700) | 12,623,000) | 10,876,300) | 8,598,900) | 8,225,400) | |
| Property, plant and equipment, net | 1,314,700) | 1,204,300) | 1,175,300) | 1,054,600) | 999,000) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 9.55 | 10.48 | 9.25 | 8.15 | 8.23 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Apple Inc. | 8.77 | 9.36 | 9.28 | 7.47 | — | |
| Arista Networks Inc. | 57.69 | 46.11 | 37.49 | — | — | |
| Cisco Systems Inc. | 27.34 | 25.82 | 21.31 | — | — | |
| Dell Technologies Inc. | 16.48 | 18.69 | 14.65 | — | — | |
| Lumentum Holdings Inc. | 3.61 | 4.75 | 4.83 | — | — | |
| Super Micro Computer Inc. | 24.54 | 18.17 | 12.95 | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Technology Hardware & Equipment | 10.54 | 11.11 | 10.59 | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Information Technology | 3.80 | 4.46 | 4.76 | — | — | |
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 = Net sales ÷ Property, plant and equipment, net
= 12,554,700 ÷ 1,314,700 = 9.55
2 Click competitor name to see calculations.
The analysis of long-term investment activity reveals a period of significant growth in operational efficiency regarding fixed asset utilization from 2019 to 2022, followed by a moderate correction in 2023.
- Net Sales Performance
- Net sales demonstrated a strong upward trajectory from 2019 through 2022, rising from 8,225,400 thousand USD to a peak of 12,623,000 thousand USD. In 2023, a slight contraction occurred, with sales decreasing to 12,554,700 thousand USD, indicating a stabilization of revenue after three years of consecutive growth.
- Fixed Asset Expansion
- Net property, plant, and equipment increased steadily throughout the analyzed period, growing from 999,000 thousand USD in 2019 to 1,314,700 thousand USD by the end of 2023. This consistent rise indicates a sustained strategy of investment in long-term physical infrastructure to support operational scale.
- Net Fixed Asset Turnover Trends
- The net fixed asset turnover ratio experienced an overall increase from 8.23 in 2019 to a peak of 10.48 in 2022. This trend suggests that revenue growth significantly outpaced the expansion of the fixed asset base during this interval, resulting in higher asset productivity. The subsequent decline to 9.55 in 2023 is attributable to the simultaneous occurrence of a slight dip in net sales and continued increases in net property, plant, and equipment, which reduced the efficiency of sales generation per unit of fixed asset.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Amphenol Corp., 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) | ||||||
| Net sales | 12,554,700) | 12,623,000) | 10,876,300) | 8,598,900) | 8,225,400) | |
| Property, plant and equipment, net | 1,314,700) | 1,204,300) | 1,175,300) | 1,054,600) | 999,000) | |
| Operating lease right-of-use assets (included in Other long-term assets) | 301,500) | 289,500) | 244,900) | 224,400) | 196,700) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 1,616,200) | 1,493,800) | 1,420,200) | 1,279,000) | 1,195,700) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 7.77 | 8.45 | 7.66 | 6.72 | 6.88 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Apple Inc. | 7.05 | 7.51 | 7.39 | 6.06 | — | |
| Arista Networks Inc. | 37.21 | 29.52 | 20.50 | — | — | |
| Cisco Systems Inc. | 18.65 | 17.19 | 14.51 | — | — | |
| Dell Technologies Inc. | 14.75 | 16.10 | 11.02 | — | — | |
| Lumentum Holdings Inc. | 3.12 | 3.95 | 4.07 | — | — | |
| Super Micro Computer Inc. | 23.02 | 16.78 | 12.07 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Technology Hardware & Equipment | 8.52 | 8.90 | 8.31 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Information Technology | 3.34 | 3.87 | 4.04 | — | — | |
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) = Net sales ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= 12,554,700 ÷ 1,616,200 = 7.77
2 Click competitor name to see calculations.
The analysis of long-term investment activity reveals a period of significant expansion in revenue coupled with a steady increase in the fixed asset base. While total net sales experienced a strong upward trajectory from 2019 through 2022, the efficiency of asset utilization, as measured by the net fixed asset turnover ratio, exhibited volatility, peaking in 2022 before contracting in 2023.
- Revenue and Asset Expansion
- Net sales grew from US$ 8.23 billion in 2019 to a peak of US$ 12.62 billion in 2022. During this period, property, plant, and equipment, net, increased consistently from US$ 1.20 billion to US$ 1.49 billion. This steady rise in the asset base indicates a disciplined approach to capacity expansion intended to support the observed growth in top-line revenue.
- Net Fixed Asset Turnover Trends
- The net fixed asset turnover ratio remained relatively stable between 2019 and 2020, followed by a sharp increase to 7.66 in 2021 and a peak of 8.45 in 2022. This upward trend demonstrates a significant improvement in the company's ability to generate sales per dollar of fixed asset investment, reaching a period of maximum asset productivity in 2022.
- Analysis of 2023 Performance
- In 2023, the net fixed asset turnover ratio declined to 7.77. This contraction is attributable to a combination of a slight reduction in net sales, which fell to US$ 12.55 billion, and a continued increase in net fixed assets to US$ 1.62 billion. The divergence between rising asset costs and stagnating revenue suggests that recent capital investments have not yet yielded a proportional increase in sales, resulting in lower overall asset efficiency for the period.
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Total Asset Turnover
Amphenol Corp., 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) | ||||||
| Net sales | 12,554,700) | 12,623,000) | 10,876,300) | 8,598,900) | 8,225,400) | |
| Total assets | 16,526,400) | 15,326,200) | 14,678,400) | 12,327,300) | 10,815,500) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.76 | 0.82 | 0.74 | 0.70 | 0.76 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Apple Inc. | 1.09 | 1.12 | 1.04 | 0.85 | — | |
| Arista Networks Inc. | 0.59 | 0.65 | 0.51 | — | — | |
| Cisco Systems Inc. | 0.56 | 0.55 | 0.51 | — | — | |
| Dell Technologies Inc. | 1.14 | 1.09 | 0.76 | — | — | |
| Lumentum Holdings Inc. | 0.38 | 0.41 | 0.49 | — | — | |
| Super Micro Computer Inc. | 1.94 | 1.62 | 1.59 | — | — | |
| Total Asset Turnover, Sector | ||||||
| Technology Hardware & Equipment | 0.99 | 1.01 | 0.89 | — | — | |
| Total Asset Turnover, Industry | ||||||
| Information Technology | 0.61 | 0.64 | 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 = Net sales ÷ Total assets
= 12,554,700 ÷ 16,526,400 = 0.76
2 Click competitor name to see calculations.
Analysis of the financial data from 2019 to 2023 reveals a period of significant expansion in both revenue generation and the asset base, characterized by fluctuating asset utilization efficiency.
- Revenue and Asset Growth Trends
- Net sales experienced a consistent upward trajectory from 2019 through 2022, rising from 8.23 billion USD to a peak of 12.62 billion USD. This growth phase was followed by a slight contraction in 2023, with sales settling at 12.55 billion USD. Concurrently, total assets grew steadily every year without exception, increasing from 10.82 billion USD in 2019 to 16.53 billion USD by the end of 2023. This indicates a continuous investment in the company's infrastructure or acquisition strategy regardless of short-term sales fluctuations.
- Total Asset Turnover Efficiency
- The total asset turnover ratio exhibits volatility, reflecting the changing relationship between asset accumulation and revenue output. After an initial decline from 0.76 in 2019 to 0.70 in 2020, the ratio recovered and reached a five-year peak of 0.82 in 2022. This peak suggests that during 2021 and 2022, revenue growth significantly outpaced the growth of the asset base, leading to optimal asset utilization.
- Recent Performance Correlation
- In 2023, the total asset turnover ratio declined back to 0.76. This reduction is attributed to a dual impact: a marginal decrease in net sales combined with a continued increase in total assets. The return to the 2019 efficiency level suggests that recent asset additions have not yet translated into proportional revenue growth, indicating a potential lag in the productivity of new investments.
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Equity Turnover
Amphenol Corp., 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) | ||||||
| Net sales | 12,554,700) | 12,623,000) | 10,876,300) | 8,598,900) | 8,225,400) | |
| Stockholders’ equity attributable to Amphenol Corporation | 8,346,500) | 7,015,600) | 6,302,000) | 5,384,900) | 4,530,300) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 1.50 | 1.80 | 1.73 | 1.60 | 1.82 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Apple Inc. | 6.17 | 7.78 | 5.80 | 4.20 | — | |
| Arista Networks Inc. | 0.81 | 0.90 | 0.74 | — | — | |
| Cisco Systems Inc. | 1.29 | 1.30 | 1.21 | — | — | |
| Dell Technologies Inc. | — | — | 38.01 | — | — | |
| Lumentum Holdings Inc. | 1.30 | 0.91 | 0.88 | — | — | |
| Super Micro Computer Inc. | 3.61 | 3.64 | 3.25 | — | — | |
| Equity Turnover, Sector | ||||||
| Technology Hardware & Equipment | 4.89 | 5.76 | 4.55 | — | — | |
| Equity Turnover, Industry | ||||||
| Information Technology | 1.54 | 1.71 | 1.77 | — | — | |
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 = Net sales ÷ Stockholders’ equity attributable to Amphenol Corporation
= 12,554,700 ÷ 8,346,500 = 1.50
2 Click competitor name to see calculations.
The financial performance between 2019 and 2023 is characterized by a substantial expansion in both revenue and the capital base, although the efficiency of equity utilization has experienced notable fluctuations.
- Net Sales Trends
- Net sales exhibited strong growth for the majority of the analyzed period, rising from 8.23 billion US dollars in 2019 to a peak of 12.62 billion US dollars in 2022. A slight contraction occurred in 2023, with sales settling at 12.55 billion US dollars, indicating a stabilization of revenue after a period of rapid escalation.
- Equity Accumulation
- Stockholders' equity attributable to the corporation demonstrated a consistent and linear upward trend. The equity base grew from 4.53 billion US dollars in 2019 to 8.35 billion US dollars in 2023. This steady increase suggests a disciplined accumulation of retained earnings or capital contributions, which has significantly strengthened the company's net asset position over the five-year span.
- Equity Turnover Dynamics
- The equity turnover ratio, which measures the efficiency of generating sales from the equity base, showed a fluctuating pattern. The ratio decreased from 1.82 in 2019 to 1.60 in 2020, followed by a recovery phase that peaked at 1.80 in 2022. However, a significant decline to 1.50 was observed in 2023. This most recent decrease is the result of the divergence between a continuing increase in equity and a stagnant revenue stream, signaling a reduction in the efficiency of equity employment during the final year of the period.
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