Danaher Corp. (NYSE:DHR)

Net Fixed Asset Turnover

The ratio experienced a strengthening trend from April 2021 through December 2022, rising from 6.83 to a peak of 8.40. This indicates that the company was increasingly efficient in generating sales from its net fixed assets during this period. However, starting in the first quarter of 2023, there is a consistent and notable decline in this ratio, dropping to 4.66 by the end of the forecasted period in March 2025. This downward trajectory suggests a decreasing efficiency in managing or utilizing fixed assets for revenue generation over the last several quarters.

Total Asset Turnover

The total asset turnover ratio exhibited moderate growth between April 2021 and December 2022, reaching from 0.29 up to 0.39. This reflects an improved ability to generate sales from total assets during this interval. From early 2023 onward, the ratio generally declined to 0.28 by March 2024, following which it fluctuated slightly, ending near 0.30 in March 2025. The data points to an overall stabilization at a lower turnover level compared to its peak, signaling some challenges in maintaining the earlier efficiency in asset utilization.

Equity Turnover

The equity turnover ratio saw an upward trend from April 2021 (0.56) through December 2021 (0.67), suggesting improved use of shareholders' equity to generate revenues. After peaking, this ratio steadily declined from early 2022 onwards, reaching a low of 0.44 by June 2024. Although a modest recovery occurred afterward, approaching 0.48 by March 2025, the overall pattern highlights a diminishing return on equity in the medium term with some recent stabilization.

The financial data reveals distinct trends in sales, property, plant and equipment (net), and net fixed asset turnover over the analyzed periods.

Sales

Sales demonstrate an overall upward trajectory from April 2020 to December 2021, growing from approximately $4.3 billion to over $8.1 billion. This represents a near doubling within a two-year span, with only minor fluctuations during that period.

However, from early 2022 onward, sales exhibit a pattern of volatility and decline. The peak around December 2022 is followed by a noticeable downward trend through the early part of 2023, reaching lower quarterly sales figures by mid-2023. There is some recovery observed toward the end of 2023 and into 2024, but sales have not returned to the previous peak levels by March 2025.

Overall, sales appear cyclical after 2021, experiencing significant variation quarter-to-quarter with an emphasis on a general weakening trend.

Property, Plant and Equipment, Net

The net value of property, plant, and equipment shows a consistent and steady increase over the entire period covered. Starting below $3 billion in April 2020, the asset base expands to over $5 billion by March 2025. This suggests ongoing capital investment and asset growth despite fluctuations observed in sales.

The incremental increases tend to be smooth and sustained, reflecting a strategic buildup of fixed assets, potentially to support production capacity or operational capabilities.

Net Fixed Asset Turnover

Net fixed asset turnover demonstrates a strong declining trend throughout the observed periods, starting at a ratio near 7 in late 2020 and falling to below 5 by early 2025.

This decline implies that the efficiency with which the company utilizes its fixed assets to generate sales is weakening over time. The ratio decrease corresponds temporally with the surge in asset base and the peaking then weakening sales pattern.

The reduced turnover ratio indicates higher capital intensity or diminishing returns on asset investments, suggesting potential overcapacity or less effective asset deployment in recent quarters.

In summary, the data portrays a scenario where sales growth momentum slowed and became more erratic after 2021, while fixed assets were continuously expanded. The declining net fixed asset turnover highlights diminishing efficiency in asset utilization relative to sales growth. This combination points to strategic challenges in balancing capital investment with revenue generation effectiveness during the most recent periods.

Sales Trend

Sales exhibited a general upward trajectory from April 2020 through December 2021, increasing from 4,343 million USD to 8,148 million USD. After peaking, sales showed a decline in early 2023, dropping to 5,949 million USD in March 2023, followed by fluctuations around the mid-5,700 to 6,500 million USD range through to March 2025, indicating some volatility and potential market or operational challenges in the later periods.

Total Assets Trend

Total assets steadily increased from 68,930 million USD in April 2020 to a peak of approximately 87,734 million USD in September 2023. Thereafter, a gradual decline is observed, with total assets reducing to around 77,542 million USD by March 2025. This suggests some divestitures, depreciation, or revaluation impacts occurring during the latter periods.

Total Asset Turnover Ratio Analysis

The total asset turnover ratio improved from 0.29 in October 2020 to a high of 0.39 in March 2022, reflecting enhanced efficiency in asset utilization for revenue generation during this time. Following this peak, the ratio showed a downward trend, declining to approximately 0.28 by December 2023 and stabilizing around 0.29-0.31 thereafter. This indicates a decrease in the efficiency with which assets are being employed to generate sales in recent quarters.

Overall Observations

The data illustrates an initial period of strong growth in sales coupled with increasing total assets and improving asset turnover, signifying efficient operational performance. However, from early 2023 onward, sales decreased and asset growth plateaued, while asset turnover efficiency declined. This alignment points to potential challenges in sustaining growth and utilizing assets effectively in the later periods analyzed.

Sales Trend

Sales exhibited a general upward trend from April 2020 through December 2021, increasing from 4,343 million USD to a peak of 8,148 million USD. This reflects a strong growth trajectory over this period. However, from early 2022 onward, sales showed volatility and a downward drift in several quarters, with values fluctuating between approximately 5,600 million USD and 8,300 million USD. Notably, sales decreased substantially in the first quarter of 2023, reaching a low point near 5,949 million USD, marking a significant drop compared to the prior quarters. The latter quarters into 2024 witnessed continued oscillation around mid-5,000 million USD to mid-6,000 million USD levels, without a clear directional trend upward or downward.

Total Stockholders' Equity Trend

Total equity rose steadily over the multi-year timeline, from about 31,055 million USD in April 2020 to approximately 53,486 million USD by the end of 2023. This indicates consistent capital growth and retained earnings accumulation. Equity peaked near 53,486 million USD in late 2023, followed by minor fluctuations and a slight decline into mid-2024, with end values around 50,800 million USD. Despite these fluctuations, overall equity levels remained significantly higher compared to the start of the period, reflecting sustained strengthening of the company’s financial base.

Equity Turnover Ratio Analysis

Equity turnover, a measure of sales generated per unit of equity, rose from 0.56 in early 2020 to a high of 0.67 during the fourth quarter of 2021. This suggests improving efficiency in generating sales from equity up to that point. However, from late 2021 onwards, the ratio declined steadily, reaching a low point around 0.44-0.45 during late 2023 and early 2024. This declining ratio indicates reduced efficiency in leveraging equity to produce sales. The ratio stabilized around 0.46 to 0.48 towards the end of the reporting horizon, suggesting a modest recovery but still below earlier peak levels.

Overall Observations

The period from 2020 to late 2021 marked strong performance with increasing sales, equity, and improved equity turnover, reflecting effective growth and capital utilization. Post-2021, sales volatility increased, equity growth moderated with some decline, and efficiency in turning equity into sales diminished. These patterns suggest challenges in maintaining high growth rates and leveraging capital as effectively as in the previous period. The data points to a need for strategic review to address declining sales efficiency and to stabilize or enhance revenue streams going forward.