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)
Builders FirstSource Inc., 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).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio decreased from 11.53 in 2018 to 10.09 in 2019, followed by a recovery and growth over the next three years, reaching 14.36 in 2021 and slightly increasing further to 14.5 in 2022. This trend indicates an initial decline in the efficiency of utilizing fixed assets to generate sales, which was subsequently reversed, leading to improved asset utilization efficiency that peaked in 2022.
- Net Fixed Asset Turnover Including Operating Lease, Right-of-Use Asset
- When factoring in operating leases and right-of-use assets, the turnover ratio shows a notable decrease from 11.53 in 2018 to 7.18 in 2019. Thereafter, it steadily increased to 8.36 in 2020, 10.79 in 2021, and 11.07 in 2022. Although the overall trend is upward from 2019 onwards, the ratio remains consistently lower than the traditional net fixed asset turnover, reflecting the impact of adding lease assets on turnover efficiency.
- Total Asset Turnover
- Total asset turnover gradually declined from 2.63 in 2018 to a low of 1.86 in 2021. However, there was a modest rebound in 2022 to 2.14. This consistent decline followed by partial recovery suggests decreasing overall asset efficiency in generating revenue over the earlier years, with some improvement visible in the most recent period.
- Equity Turnover
- Equity turnover experienced a pronounced downward trend from 12.95 in 2018 to 8.83 in 2019 and further to 7.42 in 2020. This decline continued sharply to 4.14 by 2021, with a slight recovery to 4.58 in 2022. The substantial decrease over this period may indicate growing equity levels relative to revenues or reduced efficiency in leveraging equity for sales generation, with limited improvement in the final year.
Net Fixed Asset Turnover
Builders FirstSource Inc., 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 | 22,726,418) | 19,893,856) | 8,558,874) | 7,280,431) | 7,724,771) | |
| Property, plant and equipment, net | 1,567,631) | 1,385,441) | 749,130) | 721,887) | 670,075) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 14.50 | 14.36 | 11.43 | 10.09 | 11.53 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Boeing Co. | 6.31 | 5.70 | 4.92 | — | — | |
| Caterpillar Inc. | 4.70 | 3.99 | 3.15 | — | — | |
| Eaton Corp. plc | 6.59 | 6.41 | 6.02 | — | — | |
| GE Aerospace | 5.96 | 5.47 | 1.75 | — | — | |
| Honeywell International Inc. | 6.48 | 6.18 | 5.86 | — | — | |
| Lockheed Martin Corp. | 8.27 | 8.83 | 9.07 | — | — | |
| RTX Corp. | 4.42 | 4.30 | 3.78 | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Capital Goods | 5.79 | 5.46 | 3.55 | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Industrials | 2.94 | 2.72 | 2.17 | — | — | |
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
= 22,726,418 ÷ 1,567,631 = 14.50
2 Click competitor name to see calculations.
- Net Sales
- Net sales exhibited a fluctuating upward trend over the observed periods. After a slight decline from approximately $7.72 billion in 2018 to $7.28 billion in 2019, net sales increased significantly to about $8.56 billion in 2020. This positive momentum continued with a substantial rise to nearly $19.89 billion in 2021, followed by a further increase to approximately $22.73 billion in 2022. The sharp growth in 2021 and 2022 indicates strong sales expansion in recent years.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment showed a steady increase throughout the entire period. Starting at around $670 million in 2018, the amount grew incrementally in subsequent years: roughly $722 million in 2019, $749 million in 2020, then experiencing a more pronounced rise to approximately $1.39 billion in 2021, and reaching about $1.57 billion in 2022. This trend reflects ongoing investment and growth in fixed assets over time.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio displayed some variability but an overall increasing trend across the period. The ratio decreased from 11.53 in 2018 to 10.09 in 2019, suggesting a slight reduction in the efficiency of asset use during that year. However, it recovered to 11.43 in 2020 and then rose markedly to 14.36 in 2021, maintaining a similar level at 14.5 in 2022. This improvement implies enhanced utilization of fixed assets to generate sales, particularly in the most recent years.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Builders FirstSource Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | 22,726,418) | 19,893,856) | 8,558,874) | 7,280,431) | 7,724,771) | |
| Property, plant and equipment, net | 1,567,631) | 1,385,441) | 749,130) | 721,887) | 670,075) | |
| Operating lease right-of-use assets, net | 485,704) | 457,833) | 274,562) | 292,684) | —) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 2,053,335) | 1,843,274) | 1,023,692) | 1,014,571) | 670,075) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 11.07 | 10.79 | 8.36 | 7.18 | 11.53 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Boeing Co. | 5.55 | 5.04 | 4.45 | — | — | |
| Caterpillar Inc. | 4.49 | 3.79 | 3.00 | — | — | |
| Eaton Corp. plc | 5.58 | 5.60 | 5.26 | — | — | |
| GE Aerospace | 5.08 | 4.55 | 1.63 | — | — | |
| Honeywell International Inc. | 5.58 | 5.28 | 5.15 | — | — | |
| Lockheed Martin Corp. | 7.27 | 7.54 | 7.96 | — | — | |
| RTX Corp. | 3.95 | 3.80 | 3.36 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Capital Goods | 5.13 | 4.80 | 3.25 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Industrials | 2.54 | 2.34 | 1.92 | — | — | |
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)
= 22,726,418 ÷ 2,053,335 = 11.07
2 Click competitor name to see calculations.
- Net Sales
- The net sales showed a decline from 7,724,771 thousand US dollars in 2018 to 7,280,431 thousand US dollars in 2019, representing a decrease. However, there was a significant recovery and growth in the following years, with net sales increasing to 8,558,874 thousand US dollars in 2020. This upward trend accelerated markedly in 2021 and 2022, with net sales reaching 19,893,856 thousand and 22,726,418 thousand US dollars respectively, indicating strong revenue growth in the last two recorded years.
- Property, Plant and Equipment, Net (Including Operating Lease, Right-of-Use Asset)
- The net book value of property, plant, and equipment, including operating lease and right-of-use assets, consistently increased over the five-year period. Starting at 670,075 thousand US dollars in 2018, it rose substantially to 1,014,571 thousand in 2019, and then showed moderate growth to 1,023,692 thousand in 2020. The upward trend accelerated notably in 2021 and 2022, with values of 1,843,274 thousand and 2,053,335 thousand US dollars, respectively. This suggests ongoing investment and expansion in fixed assets, particularly from 2020 onwards.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- The net fixed asset turnover ratio experienced a marked decrease from 11.53 in 2018 to 7.18 in 2019. This was followed by a recovery phase, with the ratio increasing to 8.36 in 2020, and reaching 10.79 in 2021. By 2022, the ratio slightly improved further to 11.07. This pattern suggests that despite the significant investments in fixed assets, their effective utilization in generating sales improved after 2019, nearly returning to the efficiency levels observed in 2018.
Total Asset Turnover
Builders FirstSource Inc., 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 | 22,726,418) | 19,893,856) | 8,558,874) | 7,280,431) | 7,724,771) | |
| Total assets | 10,595,160) | 10,714,343) | 4,173,671) | 3,249,490) | 2,932,309) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 2.14 | 1.86 | 2.05 | 2.24 | 2.63 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Boeing Co. | 0.49 | 0.45 | 0.38 | — | — | |
| Caterpillar Inc. | 0.69 | 0.58 | 0.50 | — | — | |
| Eaton Corp. plc | 0.59 | 0.58 | 0.56 | — | — | |
| GE Aerospace | 0.39 | 0.36 | 0.29 | — | — | |
| Honeywell International Inc. | 0.57 | 0.53 | 0.51 | — | — | |
| Lockheed Martin Corp. | 1.25 | 1.32 | 1.29 | — | — | |
| RTX Corp. | 0.42 | 0.40 | 0.35 | — | — | |
| Total Asset Turnover, Sector | ||||||
| Capital Goods | 0.54 | 0.50 | 0.43 | — | — | |
| Total Asset Turnover, Industry | ||||||
| Industrials | 0.66 | 0.58 | 0.50 | — | — | |
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
= 22,726,418 ÷ 10,595,160 = 2.14
2 Click competitor name to see calculations.
- Net Sales
- Net sales exhibited a fluctuating but overall upward trend over the five-year period. From 2018 to 2019, net sales decreased from approximately $7.72 billion to $7.28 billion. However, this was followed by a significant increase in 2020 to about $8.56 billion. A notable surge occurred in 2021, with net sales more than doubling to nearly $19.89 billion. The growth continued into 2022, reaching $22.73 billion, indicating strong revenue expansion particularly in the last two years.
- Total Assets
- Total assets showed a consistent upward trajectory from 2018 through 2021, rising from approximately $2.93 billion to $10.71 billion. The largest year-over-year increase was observed between 2020 and 2021, where assets more than doubled. In 2022, total assets slightly decreased to about $10.60 billion, suggesting a stabilization or minor consolidation after rapid growth.
- Total Asset Turnover
- Total asset turnover declined steadily from 2.63 in 2018 to 1.86 in 2021, reflecting increasingly less revenue generated per unit of asset. Nevertheless, in 2022, this ratio increased to 2.14, indicating improved efficiency in asset utilization compared to the previous year, although still below the 2018 level.
- Summary of Trends and Insights
- The data reveal substantial growth in net sales and total assets, especially a sharp increase between 2020 and 2021. While asset base expansion was significant, asset efficiency measured by turnover ratio decreased until 2021 but partially recovered in 2022. The improvement in turnover in 2022 could point to more effective management of resources or better integration of newly acquired assets following rapid growth phases. Continuous monitoring of asset utilization will be important to ensure sustainable expansion and profitability.
Equity Turnover
Builders FirstSource Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | 22,726,418) | 19,893,856) | 8,558,874) | 7,280,431) | 7,724,771) | |
| Stockholders’ equity | 4,962,566) | 4,802,481) | 1,152,783) | 824,953) | 596,338) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 4.58 | 4.14 | 7.42 | 8.83 | 12.95 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 3.57 | 2.92 | 2.55 | — | — | |
| Eaton Corp. plc | 1.22 | 1.20 | 1.20 | — | — | |
| GE Aerospace | 2.02 | 1.76 | 2.05 | — | — | |
| Honeywell International Inc. | 2.12 | 1.85 | 1.86 | — | — | |
| Lockheed Martin Corp. | 7.12 | 6.12 | 10.87 | — | — | |
| RTX Corp. | 0.92 | 0.88 | 0.78 | — | — | |
| Equity Turnover, Sector | ||||||
| Capital Goods | 2.54 | 2.28 | 2.39 | — | — | |
| Equity Turnover, Industry | ||||||
| Industrials | 3.06 | 2.63 | 2.75 | — | — | |
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
Equity turnover = Net sales ÷ Stockholders’ equity
= 22,726,418 ÷ 4,962,566 = 4.58
2 Click competitor name to see calculations.
The financial data reveals significant changes over the five-year period ending in December 2022, with notable trends in net sales, stockholders’ equity, and equity turnover.
- Net Sales
- Net sales initially declined from approximately $7.7 billion in 2018 to $7.3 billion in 2019. However, a recovery and considerable growth occurred in the subsequent years, with sales increasing to about $8.6 billion in 2020. This upward trajectory intensified sharply in 2021, reaching nearly $19.9 billion, and further grew to approximately $22.7 billion in 2022. This pattern indicates strong revenue expansion beginning in 2020 and accelerating significantly by 2021 and 2022.
- Stockholders’ Equity
- Stockholders’ equity showed steady growth from 2018 through 2020, rising from about $596 million to over $1.15 billion. A remarkable surge occurred in 2021, with equity more than quadrupling to around $4.8 billion. This high level was maintained into 2022, with a modest increase to approximately $4.96 billion. The sharp increase in equity during 2021 suggests substantial capital infusion, retained earnings growth, or other equity-enhancing events during this period.
- Equity Turnover
- Equity turnover, which measures the efficiency of use of equity to generate sales, declined consistently from 12.95 in 2018 to 7.42 in 2020. The downward trend continued more sharply in 2021, reaching a low of 4.14, then slightly rebounded to 4.58 in 2022. The reduction in equity turnover ratio corresponds with the equity base expanding at a faster rate than sales, indicating that while sales grew substantially, equity grew even more rapidly, reducing the ratio's value.
In summary, the data reflects a company undergoing rapid growth, particularly after 2020, with significant capital increases supporting expanding sales. The equity turnover ratio decline suggests that capital base expansion has outpaced sales growth in recent years, potentially signaling increased asset intensity or a strategic focus on strengthening financial position.