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)
Boston Scientific Corp., long-term (investment) activity ratios
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).
The analysis of investment activity ratios between 2018 and 2022 reveals a general trend of declining asset efficiency that reached a trough in 2020, followed by a period of modest recovery and stabilization. The data indicates a consistent pattern across multiple turnover metrics, suggesting a systemic impact on asset productivity during the middle of the analyzed period.
- Net Fixed Asset Efficiency
- The net fixed asset turnover ratio remained relatively resilient, fluctuating from a peak of 5.51 in 2018 to a low of 4.76 in 2020, before recovering to 5.18 by 2022. However, when including operating lease right-of-use assets, a more pronounced decline is observed; the ratio dropped from 5.51 in 2018 to 3.90 in 2020. The recovery in this metric to 4.48 by 2022 suggests that the impact of leased assets on turnover was more significant than that of owned fixed assets.
- Total Asset Utilization
- Total asset turnover exhibited a downward trajectory in the early years of the period, declining from 0.47 in 2018 to 0.32 in 2020. A gradual upward trend followed, with the ratio reaching 0.39 in 2022. This movement indicates that while the efficiency of the entire asset base improved after 2020, it remained below the levels recorded at the start of the five-year period.
- Equity Productivity
- Equity turnover experienced a significant contraction, falling from 1.13 in 2018 to 0.65 in 2020. This ratio subsequently stabilized, remaining constant at 0.72 throughout 2021 and 2022. The substantial decrease from the 2018 baseline suggests a reduction in the rate at which shareholder equity is being leveraged to generate revenue.
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Net Fixed Asset Turnover
Boston Scientific 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 millions) | ||||||
| Net sales | 12,682) | 11,888) | 9,913) | 10,735) | 9,823) | |
| Property, plant and equipment, net | 2,446) | 2,252) | 2,084) | 2,079) | 1,782) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 5.18 | 5.28 | 4.76 | 5.16 | 5.51 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Abbott Laboratories | 4.76 | 4.81 | — | — | — | |
| Elevance Health Inc. | 36.07 | 34.94 | — | — | — | |
| Intuitive Surgical Inc. | 2.62 | 3.04 | — | — | — | |
| Medtronic PLC | 5.85 | 5.77 | — | — | — | |
| UnitedHealth Group Inc. | 31.81 | 31.81 | — | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Health Care Equipment & Services | 17.82 | 17.31 | — | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Health Care | 7.88 | 7.74 | — | — | — | |
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 ÷ Property, plant and equipment, net
= 12,682 ÷ 2,446 = 5.18
2 Click competitor name to see calculations.
Between 2018 and 2022, net sales exhibited a general upward trajectory, increasing from US$ 9,823 million to US$ 12,682 million, despite a temporary contraction in 2020. Concurrently, a steady and consistent expansion of the net property, plant, and equipment base occurred, with values rising from US$ 1,782 million to US$ 2,446 million, signaling a sustained increase in long-term capital investment.
- Net Fixed Asset Turnover Trends
- The net fixed asset turnover ratio experienced a period of decline in the early part of the analyzed period, falling from 5.51 in 2018 to a low of 4.76 in 2020. This downward trend was a result of the asset base growing while net sales simultaneously dipped in 2020, leading to a temporary reduction in the efficiency of fixed asset utilization.
- Operational Recovery and Stabilization
- A recovery in asset productivity was observed in 2021, as the ratio rose to 5.28, driven by a sharp increase in net sales that outpaced the growth of fixed assets. By 2022, the ratio adjusted slightly to 5.18. Although the turnover ratio remains below the 2018 peak, the trend indicates that the organization has successfully integrated its increased capital investments to support a higher volume of sales.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Boston Scientific 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 millions) | ||||||
| Net sales | 12,682) | 11,888) | 9,913) | 10,735) | 9,823) | |
| Property, plant and equipment, net | 2,446) | 2,252) | 2,084) | 2,079) | 1,782) | |
| Operating lease right-of-use assets | 386) | 435) | 458) | 336) | —) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 2,832) | 2,687) | 2,542) | 2,415) | 1,782) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 4.48 | 4.42 | 3.90 | 4.45 | 5.51 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Abbott Laboratories | 4.25 | 4.26 | — | — | — | |
| Elevance Health Inc. | 31.64 | 30.12 | — | — | — | |
| Intuitive Surgical Inc. | 2.53 | 2.93 | — | — | — | |
| Medtronic PLC | 5.06 | 4.84 | — | — | — | |
| UnitedHealth Group Inc. | 21.54 | 21.54 | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Health Care Equipment & Services | 14.39 | 13.89 | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Health Care | 6.90 | 6.75 | — | — | — | |
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 ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= 12,682 ÷ 2,832 = 4.48
2 Click competitor name to see calculations.
Analysis of the net fixed asset turnover reveals a non-linear trend characterized by an initial contraction in asset efficiency followed by a gradual recovery. This fluctuation reflects the dynamic relationship between a consistently expanding capital base and fluctuating annual revenue.
- Fixed Asset Investment Trends
- Property, plant, and equipment, including right-of-use assets, exhibited consistent year-over-year growth, increasing from 1,782 million US dollars in 2018 to 2,832 million US dollars by 2022. A substantial increase was observed between 2018 and 2019, indicating a period of significant capital expansion or the recognition of new lease obligations.
- Revenue Trajectory
- Net sales demonstrated a general upward trend over the period, rising from 9,823 million US dollars in 2018 to 12,682 million US dollars in 2022. A temporary contraction occurred in 2020, with sales falling to 9,913 million US dollars, which contributed to the decline in the efficiency ratio during that fiscal year.
- Net Fixed Asset Turnover Performance
- The net fixed asset turnover ratio experienced a marked decline from 5.51 in 2018 to a low of 3.90 in 2020. This downward trend was driven by the rapid increase in the asset base occurring faster than revenue growth, compounded by the 2020 sales dip. Subsequently, the ratio improved to 4.42 in 2021 and 4.48 in 2022, signaling a recovery in the capacity of the company to generate sales from its fixed assets.
The observed patterns suggest that while the company expanded its asset base significantly between 2018 and 2022, the efficiency of these assets in generating revenue temporarily diminished before stabilizing. The recovery since 2020 indicates that the revenue growth is now better aligned with the increased investment in property, plant, and equipment.
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Total Asset Turnover
Boston Scientific 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 millions) | ||||||
| Net sales | 12,682) | 11,888) | 9,913) | 10,735) | 9,823) | |
| Total assets | 32,469) | 32,229) | 30,777) | 30,565) | 20,999) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.39 | 0.37 | 0.32 | 0.35 | 0.47 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Abbott Laboratories | 0.59 | 0.57 | — | — | — | |
| Elevance Health Inc. | 1.51 | 1.41 | — | — | — | |
| Intuitive Surgical Inc. | 0.48 | 0.42 | — | — | — | |
| Medtronic PLC | 0.35 | 0.32 | — | — | — | |
| UnitedHealth Group Inc. | 1.31 | 1.34 | — | — | — | |
| Total Asset Turnover, Sector | ||||||
| Health Care Equipment & Services | 1.06 | 1.02 | — | — | — | |
| Total Asset Turnover, Industry | ||||||
| Health Care | 0.66 | 0.62 | — | — | — | |
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
= 12,682 ÷ 32,469 = 0.39
2 Click competitor name to see calculations.
The analysis of total asset turnover from 2018 to 2022 reveals a period of initial decline followed by a gradual recovery in asset utilization efficiency. The ratio reached a peak of 0.47 in 2018 before experiencing a sharp contraction, bottoming out at 0.32 in 2020, and subsequently improving to 0.39 by the end of 2022.
- Revenue Dynamics
- Net sales exhibited a generally upward trajectory over the five-year period, growing from 9,823 million USD in 2018 to 12,682 million USD in 2022. A notable exception occurred in 2020, where sales decreased to 9,913 million USD, representing a temporary reversal of the growth trend before returning to an acceleratory phase in 2021 and 2022.
- Asset Base Expansion
- A significant increase in total assets occurred between 2018 and 2019, with the asset base expanding from 20,999 million USD to 30,565 million USD. This substantial growth in the denominator of the turnover ratio contributed to the initial decline in efficiency, as the expansion of the asset base far exceeded the growth in net sales during that specific interval.
- Efficiency Recovery and Stabilization
- Following the low point in 2020, a consistent recovery in total asset turnover is observed. The ratio improved from 0.32 in 2020 to 0.37 in 2021 and 0.39 in 2022. This improvement is attributed to net sales growth outstripping the relatively stable growth of total assets, which remained steady between 32,229 million USD and 32,469 million USD during the final two years of the period.
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Equity Turnover
Boston Scientific 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 millions) | ||||||
| Net sales | 12,682) | 11,888) | 9,913) | 10,735) | 9,823) | |
| Stockholders’ equity | 17,573) | 16,622) | 15,326) | 13,877) | 8,726) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 0.72 | 0.72 | 0.65 | 0.77 | 1.13 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Abbott Laboratories | 1.19 | 1.20 | — | — | — | |
| Elevance Health Inc. | 4.29 | 3.80 | — | — | — | |
| Intuitive Surgical Inc. | 0.56 | 0.48 | — | — | — | |
| Medtronic PLC | 0.60 | 0.59 | — | — | — | |
| UnitedHealth Group Inc. | 4.14 | 3.98 | — | — | — | |
| Equity Turnover, Sector | ||||||
| Health Care Equipment & Services | 2.61 | 2.42 | — | — | — | |
| Equity Turnover, Industry | ||||||
| Health Care | 1.69 | 1.67 | — | — | — | |
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 ÷ Stockholders’ equity
= 12,682 ÷ 17,573 = 0.72
2 Click competitor name to see calculations.
The analysis of the financial data between 2018 and 2022 reveals a significant divergence between the growth of the company's equity base and its revenue generation capacity, resulting in a overall decline in asset utilization efficiency.
- Net Sales Trends
- Revenue exhibited a general upward trajectory over the five-year period, increasing from 9,823 million USD in 2018 to 12,682 million USD in 2022. A temporary contraction occurred in 2020, where sales fell to 9,913 million USD, before recovering strongly in 2021 and continuing to grow through 2022.
- Stockholders’ Equity Growth
- A consistent and substantial increase in stockholders' equity is observed throughout the period. Equity grew from 8,726 million USD in 2018 to 17,573 million USD in 2022, representing a total increase of approximately 101%. The most pronounced jump occurred between 2018 and 2019.
- Equity Turnover Performance
- The equity turnover ratio experienced a sharp decline from 1.13 in 2018 to a low of 0.65 in 2020. This downward trend indicates that the growth in the equity base significantly outpaced the growth in net sales during these years. From 2021 to 2022, the ratio stabilized at 0.72, suggesting a period of equilibrium where sales growth began to align more closely with the expanded capital base.
In summary, the reduction in equity turnover reflects a transition toward a more capital-intensive balance sheet. While the company successfully grew its top-line revenue, the simultaneous and rapid expansion of stockholders' equity diminished the efficiency with which equity is leveraged to generate sales.
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