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Colgate-Palmolive Co. (CL)
Analysis of Property, Plant and Equipment
Difficulty: Advanced
Property, Plant and Equipment Accounting Policy
Land, buildings and machinery and equipment are stated at cost. Depreciation is provided, primarily using the straight-line method, over estimated useful lives ranging from 3 to 15 years for machinery and equipment and up to 40 years for buildings. Depreciation attributable to manufacturing operations is included in Cost of sales. The remaining component of depreciation is included in Selling, general and administrative expenses.
Source: 10-K (filing date: 2019-02-21).
Property, Plant and Equipment Disclosure
Colgate-Palmolive Co., balance sheet: property, plant and equipment
US$ in millions
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| Property, plant and equipment, cost | |
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| Accumulated depreciation | |
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| Property, plant and equipment, net | |
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Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-18), 10-K (filing date: 2015-02-19).
| Item | Description | The company |
|---|---|---|
| Property, plant and equipment, cost | Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. | Colgate-Palmolive Co.’s property, plant and equipment, cost increased from 2016 to 2017 but then slightly declined from 2017 to 2018. |
| Property, plant and equipment, net | Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. | Colgate-Palmolive Co.’s property, plant and equipment, net increased from 2016 to 2017 but then slightly declined from 2017 to 2018 not reaching 2016 level. |
Property, Plant and Equipment Ratios (Summary)
Colgate-Palmolive Co., Property, Plant and Equipment Ratios
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-18), 10-K (filing date: 2015-02-19).
| Ratio | Description | The company |
|---|---|---|
| Average age | As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. | Colgate-Palmolive Co.’s average age of depreciable property, plant and equipment deteriorated from 2016 to 2017 and from 2017 to 2018. |
Average Age
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
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| Selected Financial Data (US$ in millions) | ||||||
| Accumulated depreciation | |
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| Average age1 | |
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Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-18), 10-K (filing date: 2015-02-19).
2018 Calculations
1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, cost – Land)
= 100 × ÷ ( – ) =
| Ratio | Description | The company |
|---|---|---|
| Average age | As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. | Colgate-Palmolive Co.’s average age of depreciable property, plant and equipment deteriorated from 2016 to 2017 and from 2017 to 2018. |