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.
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Danaher Corp. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Aggregate Accruals
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Long-term Activity Ratios (Summary)
Danaher Corp., long-term (investment) activity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The financial ratios data indicate several noteworthy trends over the five-year period from 2020 to 2024.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio initially increased from 6.83 in 2020 to a peak of 7.96 in 2022, suggesting improved efficiency in utilizing fixed assets to generate sales. However, this upward trend reversed sharply in the subsequent years, dropping to 5.25 in 2023 and further to 4.78 in 2024. This decline may indicate a reduction in asset utilization or increased asset base without commensurate sales growth.
- Net Fixed Asset Turnover Including Operating Lease, Right-of-Use Asset
- This ratio follows a similar pattern to the net fixed asset turnover, rising from 5.30 in 2020 to 6.35 in 2022, then declining significantly to 4.26 in 2023 and 3.93 in 2024. The inclusion of operating lease assets shows slightly lower turnover values compared to the net fixed asset turnover alone, reflecting the additional asset base considered. The consistent pattern of rise followed by decline suggests changes in leased asset utilization and overall asset management strategies.
- Total Asset Turnover
- The total asset turnover ratio exhibits a modest increase from 0.29 in 2020 to 0.37 in 2022, indicating a gradual improvement in the efficiency of using total assets to generate revenue. However, this was followed by a decrease to 0.28 in 2023, with a slight recovery to 0.31 in 2024. Despite the fluctuations, the ratio remains relatively stable, generally reflecting steady asset productivity but with some recent challenges in maintaining higher turnover levels.
- Equity Turnover
- The equity turnover ratio shows a rising trend from 0.56 in 2020 to 0.65 in 2021, then a minor decrease to 0.63 in 2022. A notable decline occurs in 2023 to 0.45, followed by a slight recovery to 0.48 in 2024. This pattern suggests variations in the efficiency of equity capital usage, with a weakening in 2023 and partial rebound thereafter. The downward shift could imply changes in equity structure or profitability relative to equity.
Overall, the asset turnover ratios reveal an early period of improving operational efficiency up to 2022, followed by a period of declining asset utilization in 2023 and 2024. Both fixed asset and total asset turnovers highlight challenges in maintaining prior efficiency levels. Similarly, equity turnover reflects a slight deterioration in capital efficiency during the latter years.
Net Fixed Asset Turnover
Danaher Corp., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales | ||||||
| Property, plant and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net fixed asset turnover = Sales ÷ Property, plant and equipment, net
= ÷ =
2 Click competitor name to see calculations.
- Sales
- Sales exhibited an overall upward trend from 2020 to 2022, increasing from 22,284 million USD in 2020 to a peak of 31,471 million USD in 2022. However, in the subsequent years, sales sharply declined to 23,890 million USD in 2023 and slightly decreased further to 23,875 million USD in 2024, returning to levels close to those reported in 2020.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment consistently increased over the entire period. Starting from 3,262 million USD in 2020, this figure rose steadily each year, reaching 4,990 million USD by the end of 2024. This indicates a continuous investment and expansion in fixed assets.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio showed a growth trend from 6.83 in 2020 to a peak of 7.96 in 2022, reflecting improved efficiency in utilizing fixed assets to generate sales during this span. However, there was a marked decline in the ratio to 5.25 in 2023 and 4.78 in 2024, suggesting that despite increased investment in fixed assets, sales did not keep pace, leading to reduced asset utilization efficiency.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Danaher Corp., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales | ||||||
| Property, plant and equipment, net | ||||||
| Operating lease ROU assets (classified in Other long-term assets) | ||||||
| Property, plant and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Sales ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
- Sales
- Sales increased significantly from 22,284 million US dollars in 2020 to a peak of 31,471 million US dollars in 2022. However, there was a notable decline in sales in 2023 to 23,890 million US dollars, stabilizing slightly in 2024 at 23,875 million US dollars, indicating a substantial reduction after the 2022 peak.
- Property, plant and equipment, net (including operating lease, right-of-use asset)
- The net value of property, plant, and equipment showed consistent growth throughout the period. Beginning at 4,204 million US dollars in 2020, it increased steadily each year, reaching 6,074 million US dollars by 2024. This reflects ongoing investment in fixed assets despite fluctuations in sales.
- Net fixed asset turnover (including operating lease, right-of-use asset)
- The net fixed asset turnover ratio, which indicates the efficiency in using fixed assets to generate sales, rose from 5.3 in 2020 to a high of 6.35 in 2022. Following this peak, the ratio declined sharply to 4.26 in 2023 and further to 3.93 in 2024. The decreasing turnover ratio after 2022 suggests reduced efficiency in using the expanded asset base to generate sales during the latter period.
Total Asset Turnover
Danaher Corp., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Total Asset Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Total Asset Turnover, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Total asset turnover = Sales ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Sales
- Sales demonstrate a rising trend from 2020 to 2022, increasing from 22,284 million US dollars to a peak of 31,471 million US dollars. However, there is a notable decline in 2023, where sales fall sharply to 23,890 million US dollars and then stabilize in 2024 at 23,875 million US dollars. This indicates a period of growth followed by a significant contraction and stabilization in sales revenues.
- Total assets
- Total assets steadily increase from 76,161 million US dollars in 2020 to a maximum of 84,488 million US dollars in 2023. In 2024, the asset base decreases to 77,542 million US dollars. This pattern suggests overall asset growth with a reduction in the final year, possibly linked to the downturn observed in sales.
- Total asset turnover
- The total asset turnover ratio, measuring efficiency in utilizing assets to generate sales, rises from 0.29 in 2020 to a peak of 0.37 in 2022. Similar to sales and assets, it declines in 2023 to 0.28 and shows a slight recovery in 2024 to 0.31. The trend in turnover indicates improved asset utilization efficiency through 2022, followed by decreased efficiency that partially recovers thereafter.
Equity Turnover
Danaher Corp., equity turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales | ||||||
| Total Danaher stockholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Equity Turnover, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Equity Turnover, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Equity turnover = Sales ÷ Total Danaher stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals notable fluctuations in key metrics.
- Sales
- Sales increased significantly from 22,284 million US dollars in 2020 to a peak of 31,471 million US dollars in 2022. However, in the subsequent years, there was a marked decline, with sales dropping to 23,890 million US dollars in 2023 and stabilizing slightly to 23,875 million US dollars in 2024. This shows a strong growth phase followed by a sharp downturn and subsequent stabilization at a lower level.
- Total Danaher Stockholders’ Equity
- Stockholders’ equity demonstrated a steady upward trend from 39,766 million US dollars in 2020 to 53,486 million US dollars in 2023. In 2024, there was a decrease to 49,543 million US dollars. Overall, the equity value grew substantially over the first four years before experiencing a moderate contraction in the final year.
- Equity Turnover
- The equity turnover ratio showed an initial increase from 0.56 in 2020 to 0.65 in 2021, indicating improved efficiency in generating sales from equity. It then slightly declined to 0.63 in 2022 but dropped more significantly to 0.45 in 2023 before a slight recovery to 0.48 in 2024. The downward trend in equity turnover in the two most recent years suggests diminishing efficiency in the use of equity to generate sales.
In summary, the data depicts a period of robust sales growth culminating in 2022, followed by a sharp reduction and plateau. Equity steadily increased until 2023 before declining in 2024. The efficiency metric, equity turnover, peaked early in the period but declined concurrently with the fall in sales, indicating potential challenges in operational performance or capital utilization in the recent years.