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)
Colgate-Palmolive Co., 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 long-term activity ratios indicates fluctuating levels of asset efficiency and a highly volatile relationship between equity and revenue generation over the five-year period from 2018 to 2022.
- Fixed Asset Utilization
- The net fixed asset turnover ratio demonstrated a consistent upward trajectory from 4.01 in 2018 to a peak of 4.67 in 2021, suggesting an increase in the efficiency of fixed assets in generating revenue. This trend reversed in 2022, with the ratio declining to 4.17. A similar pattern is observed when including operating lease right-of-use assets, where the ratio peaked in 2021 at 4.09 and contracted to 3.75 in 2022, remaining consistently lower than the standard net fixed asset turnover measurement.
- Overall Asset Efficiency
- Total asset turnover experienced a significant decline between 2018 and 2019, dropping from 1.28 to 1.04. After remaining relatively stagnant in 2020, a modest recovery was observed in 2021 and 2022, ending the period at 1.14. This suggests that while efficiency improved slightly in recent years, it has not returned to the levels observed in 2018.
- Equity Turnover Dynamics
- The equity turnover ratio exhibited extreme volatility throughout the reported period. Following a high of 134.13 in 2019, the ratio underwent a sharp contraction to 22.17 in 2020. Since 2021, a gradual recovery trend has emerged, with the ratio increasing to 28.61 in 2021 and further rising to 44.81 by the end of 2022.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Net Fixed Asset Turnover
Colgate-Palmolive Co., 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 | 17,967) | 17,421) | 16,471) | 15,693) | 15,544) | |
| Property, plant and equipment, net | 4,307) | 3,730) | 3,716) | 3,750) | 3,881) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 4.17 | 4.67 | 4.43 | 4.18 | 4.01 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Procter & Gamble Co. | 3.78 | 3.51 | — | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Consumer Staples | 5.21 | 5.06 | — | — | — | |
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
= 17,967 ÷ 4,307 = 4.17
2 Click competitor name to see calculations.
An analysis of the company's long-term investment activity reveals a period of consistent revenue growth coupled with fluctuating fixed asset efficiency. Net sales grew steadily from 15,544 million US dollars in 2018 to 17,967 million US dollars by 2022, indicating a sustained expansion in market reach or pricing power.
- Revenue Performance
- Net sales exhibited a continuous upward trend throughout the five-year period, increasing every year. This growth provided the primary driver for the overall improvement in asset utilization until the final year of the period.
- Fixed Asset Management
- Net property, plant, and equipment remained relatively stagnant between 2018 and 2021, experiencing a slight decline from 3,881 million US dollars to 3,730 million US dollars. A significant shift occurred in 2022, when the asset base increased to 4,307 million US dollars, signaling a substantial capital investment in long-term infrastructure.
- Net Fixed Asset Turnover Dynamics
- The net fixed asset turnover ratio increased progressively from 4.01 in 2018 to a peak of 4.67 in 2021. This trend indicates an increase in the efficiency with which the company utilized its fixed assets to generate sales. However, a reversal occurred in 2022, with the ratio falling to 4.17. This decline is the result of the expanded asset base in 2022 growing at a faster rate than the corresponding increase in net sales, thereby reducing the turnover efficiency in the short term.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Colgate-Palmolive Co., 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 | 17,967) | 17,421) | 16,471) | 15,693) | 15,544) | |
| Property, plant and equipment, net | 4,307) | 3,730) | 3,716) | 3,750) | 3,881) | |
| Operating lease right-of use assets (included in Other assets) | 478) | 527) | 521) | 502) | —) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 4,785) | 4,257) | 4,237) | 4,252) | 3,881) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 3.75 | 4.09 | 3.89 | 3.69 | 4.01 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Procter & Gamble Co. | 3.65 | 3.38 | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Consumer Staples | 4.69 | 4.55 | — | — | — | |
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)
= 17,967 ÷ 4,785 = 3.75
2 Click competitor name to see calculations.
The company demonstrated a consistent upward trajectory in net sales from 2018 to 2022, increasing from US$ 15,544 million to US$ 17,967 million. While top-line growth remained steady, the efficiency of net fixed assets—including right-of-use assets—in generating this revenue experienced volatility, reflecting varying alignments between capital investment and sales growth.
- Net Sales Performance
- A sustained growth pattern is observed in net sales over the five-year period. The increase was incremental from 2018 through 2020, followed by more pronounced growth in 2021 and 2022, indicating an expanding revenue base.
- Net Fixed Asset Investment Trends
- Net fixed assets increased from US$ 3,881 million in 2018 to US$ 4,785 million in 2022. The asset base grew significantly between 2018 and 2019, remained relatively stagnant between 2019 and 2021, and then saw a substantial increase in 2022. This suggests a period of capital stability followed by a renewed phase of investment or the acquisition of new right-of-use assets.
- Net Fixed Asset Turnover Analysis
- The net fixed asset turnover ratio exhibited a fluctuating trend, beginning at 4.01 in 2018 and closing at 3.75 in 2022. A decrease occurred in 2019 (3.69) as the growth in the asset base outpaced sales growth. Efficiency subsequently improved through 2021, peaking at 4.09, because sales increased while fixed assets remained flat. However, the ratio declined to 3.75 in 2022, as the sharp increase in net fixed assets again outweighed the growth in net sales.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Total Asset Turnover
Colgate-Palmolive Co., 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 | 17,967) | 17,421) | 16,471) | 15,693) | 15,544) | |
| Total assets | 15,731) | 15,040) | 15,920) | 15,034) | 12,161) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 1.14 | 1.16 | 1.03 | 1.04 | 1.28 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Procter & Gamble Co. | 0.68 | 0.64 | — | — | — | |
| Total Asset Turnover, Industry | ||||||
| Consumer Staples | 1.47 | 1.41 | — | — | — | |
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
= 17,967 ÷ 15,731 = 1.14
2 Click competitor name to see calculations.
Between 2018 and 2022, a consistent increase in net sales is observed, while total assets exhibited more volatility, leading to fluctuations in the total asset turnover ratio.
- Net Sales Trends
- Net sales grew steadily from 15,544 million US$ in 2018 to 17,967 million US$ in 2022. This uninterrupted upward trajectory indicates sustained revenue growth over the five-year period.
- Total Asset Movements
- The asset base experienced a significant expansion between 2018 and 2020, rising from 12,161 million US$ to a peak of 15,920 million US$. A subsequent decrease occurred in 2021, followed by a modest increase to 15,731 million US$ in 2022.
- Total Asset Turnover Interpretation
- The total asset turnover ratio declined sharply from 1.28 in 2018 to 1.04 in 2019, as the increase in total assets significantly outpaced the growth in net sales. The ratio reached its lowest point of 1.03 in 2020 before recovering to 1.16 in 2021. This recovery was driven by a reduction in the asset base coupled with continued sales growth, suggesting an improvement in asset utilization efficiency. By 2022, the ratio settled at 1.14, indicating that while efficiency improved from the 2020 low, it remained below the 2018 baseline.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Equity Turnover
Colgate-Palmolive Co., 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 | 17,967) | 17,421) | 16,471) | 15,693) | 15,544) | |
| Total Colgate-Palmolive Company shareholders’ equity | 401) | 609) | 743) | 117) | (102) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 44.81 | 28.61 | 22.17 | 134.13 | — | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Procter & Gamble Co. | 1.72 | 1.64 | — | — | — | |
| Equity Turnover, Industry | ||||||
| Consumer Staples | 5.26 | 5.06 | — | — | — | |
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 ÷ Total Colgate-Palmolive Company shareholders’ equity
= 17,967 ÷ 401 = 44.81
2 Click competitor name to see calculations.
A consistent growth trend is observed in net sales over the analyzed five-year period, rising from 15,544 million US$ in 2018 to 17,967 million US$ by the end of 2022. This steady increase in top-line revenue contrasts with the significant volatility observed in shareholders' equity, which shifted from a negative position to a peak in 2020 before declining through 2022.
- Net Sales Performance
- Revenue figures indicate a sustained upward trajectory, reflecting a stable expansion of sales volume or value over the reported duration.
- Equity Position
- The equity base transitioned from a deficit of -102 million US$ in 2018 to a high of 743 million US$ in 2020. Following this peak, equity decreased consecutively in 2021 and 2022, ending at 401 million US$.
- Equity Turnover Trends
- The equity turnover ratio exhibited extreme sensitivity to changes in the equity base. A peak ratio of 134.13 was recorded in 2019, coinciding with a minimal positive equity balance relative to sales. As equity increased in 2020, the turnover ratio contracted sharply to 22.17. A subsequent rise in the ratio to 44.81 by 2022 is attributable to the combined effect of rising net sales and a reducing equity base.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?