Analysis of Geographic Areas
Colgate-Palmolive Co. operates in 2 regions: United States and International.
Area Asset Turnover
Colgate-Palmolive Co., asset turnover by geographic area
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | 2.31 | 2.73 | 2.73 | 2.43 | — |
| International | 5.43 | 5.28 | 4.82 | 4.70 | — |
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 annual geographic area asset turnover ratios indicate distinct patterns for the United States and International segments over the examined period from 2019 to 2022.
- United States
- The asset turnover ratio for the United States shows a noticeable increase from 2.43 in 2019 to 2.73 in 2020, maintaining the 2.73 level into 2021. However, in 2022, the ratio declined to 2.31. This suggests an initial improvement in asset efficiency over the two years, followed by a reduction in asset utilization or sales efficiency in the final year.
- International
- The International segment exhibits a consistent upward trend in asset turnover ratios throughout the period. Starting at 4.7 in 2019, the ratio increased steadily each year, reaching 4.82 in 2020, 5.28 in 2021, and 5.43 in 2022. This consistent growth indicates progressively more efficient use of assets in generating sales internationally.
- Overall comparison and insights
- Comparatively, the International asset turnover ratios are significantly higher than those in the United States across all years available, suggesting higher asset efficiency outside the domestic market. While the domestic ratio peaks in 2020 and 2021 before declining, the international ratio maintains a robust upward trajectory, reinforcing the strength of international operations in terms of asset utilization. The slight divergence in trends may reflect differing market conditions, operational strategies, or investment levels between the geographic areas.
Area Asset Turnover: United States
Colgate-Palmolive Co.; United States; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net sales | 5,943) | 5,409) | 5,159) | 4,607) | —) |
| Long-lived assets | 2,569) | 1,981) | 1,889) | 1,895) | —) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 2.31 | 2.73 | 2.73 | 2.43 | — |
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
Area asset turnover = Net sales ÷ Long-lived assets
= 5,943 ÷ 2,569 = 2.31
- Net Sales
- Net sales demonstrate a consistent upward trend from 2019 through 2022. Starting at 4,607 million US dollars in 2019, net sales increased to 5,159 million in 2020, 5,409 million in 2021, and further to 5,943 million in 2022. This represents a steady growth in sales revenue over the four-year period.
- Long-Lived Assets
- Long-lived assets remained relatively stable from 2019 to 2021, showing minor fluctuations with 1,895 million US dollars in 2019, slightly decreasing to 1,889 million in 2020, and then increasing moderately to 1,981 million in 2021. However, in 2022, there is a marked increase to 2,569 million, indicating a significant investment or acquisition of long-term assets in that year.
- Area Asset Turnover
- The area asset turnover ratio, which measures efficiency in using assets to generate sales, improved from 2.43 in 2019 to 2.73 in both 2020 and 2021, implying enhanced asset utilization during these years. However, in 2022, the ratio declined to 2.31, reflecting a decrease in efficiency despite the higher sales figures, likely influenced by the substantial increase in long-lived assets.
Area Asset Turnover: International
Colgate-Palmolive Co.; International; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net sales | 12,024) | 12,012) | 11,312) | 11,086) | —) |
| Long-lived assets | 2,216) | 2,275) | 2,348) | 2,359) | —) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 5.43 | 5.28 | 4.82 | 4.70 | — |
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
Area asset turnover = Net sales ÷ Long-lived assets
= 12,024 ÷ 2,216 = 5.43
- Net Sales Trend
- Net sales in the International geographic area experienced a steady increase over the period from 2019 to 2022. Starting at 11,086 million US dollars in 2019, net sales rose slightly to 11,312 million in 2020, followed by further growth to 12,012 million in 2021. The figure stabilized in 2022 with a marginal increase to 12,024 million US dollars, indicating a plateau in sales growth during the last year.
- Long-Lived Assets Trend
- Long-lived assets exhibited a gradual decline across the same period. From 2,359 million US dollars in 2019, the assets slightly decreased to 2,348 million in 2020. This downward trend continued with further reductions to 2,275 million in 2021 and 2,216 million in 2022. This consistent decline may suggest asset disposals, depreciation, or a reduction in capital expenditures within the International area.
- Area Asset Turnover Trend
- The area asset turnover ratio displayed a continuous upward trend, reflecting increasing efficiency in generating sales from the asset base. The ratio improved from 4.7 in 2019 to 4.82 in 2020, with further increments to 5.28 in 2021 and 5.43 in 2022. This increasing ratio indicates that the company is generating more sales per unit of asset value over time, which aligns with the observed pattern of stable to growing sales alongside decreasing asset values.
- Overall Analysis
- The data indicates a scenario where sales in the International segment have grown modestly and then stabilized, while investments in long-lived assets have been gradually reduced. Meanwhile, asset turnover efficiency has improved noticeably, suggesting better utilization of existing assets. This combination points toward effective management of asset resources and a focus on maximizing returns from the existing asset base rather than expanding it significantly.
Net sales
Colgate-Palmolive Co., net sales by geographic area
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | 5,943) | 5,409) | 5,159) | 4,607) | —) |
| International | 12,024) | 12,012) | 11,312) | 11,086) | —) |
| Total | 17,967) | 17,421) | 16,471) | 15,693) | —) |
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 presented data exhibits a consistent upward trajectory in net sales across both the United States and international markets over the observed periods from 2019 to 2022.
- United States
- The net sales in the United States show a steady increase each year. Beginning at 4,607 million US dollars in 2019, the net sales rose to 5,159 million in 2020, followed by 5,409 million in 2021, and reaching 5,943 million in 2022. This indicates an approximate average annual growth rate of about 8%, demonstrating healthy domestic market expansion.
- International
- International net sales also display growth, albeit at a slower pace in comparison to the domestic figures. Starting at 11,086 million US dollars in 2019, sales increased slightly to 11,312 million in 2020, saw a more notable rise to 12,012 million in 2021, and then remained almost flat at 12,024 million in 2022. This pattern suggests steady international revenue with a plateau observed in the final year.
- Total Net Sales
- Total net sales, combining both domestic and international figures, reflect a positive but decelerating upward trend. The total increased from 15,693 million US dollars in 2019 to 16,471 million in 2020, then to 17,421 million in 2021, and finally to 17,967 million in 2022. While the overall growth is consistent, the rate of increase appears to decline, particularly due to the near stagnation of international sales in the last period reported.
In summary, net sales demonstrate sustainable growth primarily driven by the domestic market, while international market sales growth has moderated, potentially signaling market saturation or other constraints impacting growth abroad.
Long-lived assets
Colgate-Palmolive Co., long-lived assets by geographic area
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | 2,569) | 1,981) | 1,889) | 1,895) | —) |
| International | 2,216) | 2,275) | 2,348) | 2,359) | —) |
| Total | 4,785) | 4,256) | 4,237) | 4,254) | —) |
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).
- United States Long-Lived Assets
-
The value of long-lived assets in the United States demonstrates a generally positive trend from 2019 to 2022. Starting at 1,895 million US dollars in 2019, the asset base slightly decreased to 1,889 million in 2020. However, it rebounded to 1,981 million in 2021 and experienced a significant increase to 2,569 million by the end of 2022. This reflects a substantial growth in long-lived assets in the U.S. market over the period, especially between 2021 and 2022.
- International Long-Lived Assets
-
International long-lived assets show a declining trend during the same period. The values decreased from 2,359 million US dollars in 2019 to 2,348 million in 2020, followed by a further decline to 2,275 million in 2021, and continued downward to 2,216 million in 2022. This steady reduction indicates a contraction or divestiture in international long-lived assets over the four-year period.
- Total Long-Lived Assets
-
The total long-lived assets present relative stability between 2019 and 2021, with values fluctuating only slightly from 4,254 million in 2019 to 4,237 million in 2020 and then 4,256 million in 2021. However, there is a notable increase in total long-lived assets to 4,785 million by the end of 2022, largely driven by the significant rise in U.S. assets. This suggests an overall growth in long-lived assets at the consolidated level, despite the international decline.
- Summary of Trends
-
Overall, the data indicates a strategic shift in asset allocation, with increased investment or asset retention in the United States and reduced emphasis on international assets over the four-year period. The sharp increase in U.S.-based long-lived assets in 2022 signals a possible focus on domestic operations or capital expenditures. Meanwhile, the decline internationally may reflect divestitures, impairments, or reallocations of resources.