Bristol-Myers Squibb Co. (NYSE:BMY)

An examination of long-term activity ratios reveals varying trends in asset utilization and equity efficiency over the five-year period. Generally, the company demonstrates a moderate level of asset turnover, while equity turnover exhibits more substantial fluctuations.

Net Fixed Asset Turnover

The net fixed asset turnover ratio experienced a consistent, albeit gradual, decline from 7.67 in 2021 to 6.39 in 2025. This suggests a decreasing efficiency in generating revenue from fixed assets. The inclusion of operating lease right-of-use assets presents a lower turnover figure, also declining from 6.66 to 5.28 over the same period, indicating that incorporating these assets further reduces the efficiency metric.

Total Asset Turnover

Total asset turnover showed an initial increase from 0.42 in 2021 to 0.48 in 2022, followed by relative stability at 0.47 in 2023, and then a further increase to 0.54 in 2025. This indicates an improving ability to generate sales from all assets, particularly in the later years of the observed period. The increase, while positive, remains relatively modest.

Equity Turnover

Equity turnover demonstrated the most significant changes. It increased from 1.29 in 2021 to 1.49 in 2022 and 1.53 in 2023, then experienced a substantial jump to 2.96 in 2024 before decreasing to 2.61 in 2025. This suggests a considerable improvement in revenue generation per dollar of equity in 2024, followed by a slight pullback in the final year. The volatility in this ratio warrants further investigation to understand the underlying drivers of these fluctuations.

In summary, while the company maintains a reasonable level of total asset turnover, the declining net fixed asset turnover suggests potential inefficiencies in utilizing fixed assets. The significant changes in equity turnover indicate a dynamic relationship between revenue and equity, requiring further scrutiny to determine the sustainability of the observed improvements.

The net fixed asset turnover ratio decreased over the five-year period examined. Revenues exhibited relative stability with a slight increase in the later years, while property, plant, and equipment consistently increased. This combination resulted in a declining trend for the turnover ratio.

Net Fixed Asset Turnover

The net fixed asset turnover ratio began at 7.67 in 2021. A moderate decrease was observed in 2022, with the ratio falling to 7.38. The decline accelerated in 2023, reaching 6.77, and remained constant in 2024. Further reduction occurred in 2025, with the ratio decreasing to 6.39. This indicates a diminishing efficiency in generating revenue from fixed assets.

Revenues experienced a slight dip in 2022 before recovering and modestly increasing in 2024 and 2025. However, the growth in revenues was insufficient to offset the consistent expansion of property, plant, and equipment. The continuous investment in fixed assets, without a corresponding proportional increase in revenue, contributed to the observed decline in the net fixed asset turnover ratio.

Revenues

Revenues decreased from US$46,385 million in 2021 to US$46,159 million in 2022. A recovery was then seen, with revenues reaching US$48,300 million in 2024 and US$48,194 million in 2025. The fluctuations were relatively small compared to the changes in fixed assets.

Property, Plant, and Equipment

Property, plant, and equipment increased steadily throughout the period, from US$6,049 million in 2021 to US$7,543 million in 2025. This consistent growth in fixed assets, without a commensurate increase in revenue, is a key driver of the declining net fixed asset turnover ratio.

The consistent increase in property, plant, and equipment suggests ongoing investment in operational capacity. However, the decreasing net fixed asset turnover ratio indicates that these investments are not yet translating into proportionally higher revenues, potentially signaling inefficiencies in asset utilization or a lag between investment and revenue generation.

The net fixed asset turnover ratio, calculated using property, plant, and equipment including operating lease and right-of-use assets, demonstrates a generally declining trend over the five-year period. Revenues exhibited relative stability initially, followed by an increase in later years, while the value of fixed assets consistently increased.

Overall Trend

The net fixed asset turnover ratio decreased from 6.66 in 2021 to 5.28 in 2025. This indicates a diminishing efficiency in generating revenue from its fixed asset base.

Revenue Analysis

Revenues remained relatively flat between 2021 and 2023, fluctuating around the $46 billion mark. A notable increase to $48.3 billion occurred in 2024, followed by a slight decrease to $48.194 billion in 2025. This revenue pattern influences the observed turnover ratio.

Fixed Asset Analysis

Property, plant, and equipment, including operating leases and right-of-use assets, increased steadily from $6.968 billion in 2021 to $9.125 billion in 2025. This consistent growth in fixed assets, coupled with relatively stable or slightly declining revenues in earlier periods, contributed to the decreasing turnover ratio.

Ratio Fluctuations

The most significant decline in the net fixed asset turnover ratio occurred between 2021 and 2023, dropping from 6.66 to 5.60. While the ratio experienced a slight recovery to 5.78 in 2024 due to increased revenues, it subsequently decreased again in 2025 to 5.28. This suggests that the increase in fixed assets is outpacing revenue growth, particularly in the latter part of the period.

The observed trend suggests that the company is becoming less efficient in utilizing its fixed assets to generate sales. Further investigation may be warranted to understand the reasons behind the increasing asset base and whether these investments are expected to yield higher returns in future periods.

The total asset turnover ratio exhibits an increasing trend over the five-year period. Initially, the ratio stood at 0.42 in 2021, and it has progressively risen to 0.54 by 2025. This indicates a growing efficiency in utilizing assets to generate revenue.

Total Asset Turnover Trend

From 2021 to 2022, the ratio increased from 0.42 to 0.48, representing a 14.3% improvement. This suggests the company became more effective at converting its assets into sales during this period.

The increase continued from 2022 to 2023, albeit at a slower pace, with the ratio reaching 0.47. This indicates continued, though diminished, improvement in asset utilization.

A more substantial increase was observed between 2023 and 2024, with the ratio climbing to 0.52. This suggests a renewed focus or success in improving operational efficiency.

The upward trend persisted into 2025, with the ratio reaching 0.54. This represents the highest value within the observed period and signifies the most efficient asset utilization.

Concurrently, total assets have decreased over the same period, moving from 109,314 US$ millions in 2021 to 90,038 US$ millions in 2025. Revenues experienced a slight decrease from 2021 to 2023, followed by increases in 2024 and 2025. The combined effect of decreasing assets and increasing revenues appears to be the primary driver of the observed increase in the total asset turnover ratio.

The consistent rise in the total asset turnover ratio suggests improved operational performance and a more effective deployment of assets. Further investigation into the factors contributing to this improvement, such as changes in sales strategies, asset management practices, or product mix, could provide valuable insights.

The equity turnover ratio demonstrates a notable increasing trend over the observed period. Initially, the ratio experienced growth from 2021 to 2023, followed by a significant surge in 2024, and a slight decrease in 2025.

Equity Turnover Trend

In 2021, the equity turnover ratio was 1.29. This increased to 1.49 in 2022, and further to 1.53 in 2023, indicating a growing ability to generate revenue from shareholders’ equity. A substantial increase was then observed in 2024, with the ratio reaching 2.96. This suggests a significantly improved efficiency in utilizing equity to generate sales. The ratio decreased slightly to 2.61 in 2025, though remaining considerably higher than the values recorded in the earlier years of the period.

Revenues exhibited a relatively stable pattern between 2021 and 2023, fluctuating around the US$46 billion mark. A considerable increase in revenues was observed in 2024, reaching US$48.3 billion, aligning with the peak in equity turnover. Revenues remained relatively consistent in 2025 at US$48.194 billion.

Shareholders’ Equity Trend

Total shareholders’ equity experienced a consistent decline from 2021 to 2024. Starting at US$35.946 billion in 2021, it decreased to US$31.061 billion in 2022, US$29.430 billion in 2023, and reached a low of US$16.335 billion in 2024. A modest recovery was noted in 2025, with equity increasing to US$18.473 billion. This decreasing equity base, coupled with increasing revenues from 2023 onwards, likely contributed to the observed increases in the equity turnover ratio.

The combined effect of relatively stable, then increasing revenues and decreasing shareholders’ equity resulted in a substantial increase in the equity turnover ratio, particularly in 2024. The slight decrease in the ratio in 2025, despite continued high revenues, suggests a partial stabilization of the equity base.