Dollar General Corp. (NYSE:DG)

The financial data reveals several notable trends regarding asset utilization and turnover ratios over the analyzed periods.

Net Fixed Asset Turnover

This metric shows a gradual decline from 8.63 in early 2019 to 6.36 by early 2024. The decrease suggests a reduction in the efficiency of fixed assets in generating sales over time, indicating potentially increased investment in fixed assets without a proportional increase in sales or changes in asset management strategies.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

A sharp decline is evident between 2019 and 2020, dropping from 8.63 to 2.3, after which the ratio remains relatively stable but low, fluctuating slightly between 2.25 and 2.52 through early 2024. This significant drop likely reflects the impact of accounting standard changes recognizing leased assets, which has substantially increased the asset base considered in this ratio, thus reducing the turnover rate.

Total Asset Turnover

The total asset turnover ratio declines significantly from 1.94 in 2019 to 1.22 in 2020 and then stabilizes around 1.3 until a slight decrease to 1.26 in 2024. This trend implies a reduction in overall asset efficiency initially, possibly due to asset growth or operational changes, with a relatively stable turnover performance in recent years.

Equity Turnover

Equity turnover shows an increasing trend from 3.99 in 2019 to a peak of 6.83 in 2023, followed by a decrease to 5.73 in 2024. The overall upward movement indicates improved effectiveness in utilizing shareholders' equity to generate revenue, though the recent decline might suggest changes in equity base or revenue growth rates that warrant further investigation.

Net Sales

Net sales exhibit a consistent upward trend over the six-year period. Starting at approximately $25.6 billion in early 2019, sales increased steadily each year, reaching about $38.7 billion by early 2024. This growth indicates a strong and continuous expansion in revenue generation capacity.

Net Property and Equipment

The value of net property and equipment rose significantly across the timeline. From roughly $3.0 billion in early 2019, there was a progressive increase year over year, culminating in nearly $6.1 billion by early 2024. This suggests substantial investment in fixed assets, possibly for expansion, renovation, or upgrading of facilities.

Net Fixed Asset Turnover

The net fixed asset turnover ratio shows a declining trend throughout the period. Beginning at 8.63 in early 2019, it slightly decreased to 8.47 in early 2020, then rose marginally to 8.65 in 2021, followed by a steady decline to 6.36 in early 2024. This decline indicates that despite increased sales, the efficiency with which net fixed assets are generating sales is decreasing, potentially due to the rapid accumulation of assets outpacing sales growth.

Net Sales

Net sales exhibited a consistent upward trend throughout the periods analyzed, increasing from approximately $25.6 billion in early 2019 to nearly $38.7 billion by early 2024. This represents a substantial growth in revenue over six years, indicating expansion in business operations and possibly improved market penetration or sales effectiveness.

Net Property and Equipment

Net property and equipment, inclusive of operating leases and right-of-use assets, showed a marked increase over the same timeframe. Starting at about $3.0 billion in 2019, this figure rose sharply to over $17.2 billion by 2024. The significant jump between 2019 and 2020 suggests possible changes in reporting standards or a strategic increase in asset acquisition or capital expenditures to support operations.

Net Fixed Asset Turnover

The ratio of net fixed asset turnover, which measures sales generated per unit of fixed assets, declined significantly from 8.63 in 2019 to around 2.3 in 2020, reflecting the large increase in fixed assets relative to sales. Following this drop, the ratio remained relatively stable, fluctuating slightly around the 2.3 to 2.5 range through 2024. This steady ratio implies consistent efficiency in utilizing fixed assets to generate sales after the initial adjustment period.

The analysis of the financial data over the six-year period reveals several notable trends in key performance indicators.

Net Sales

Net sales demonstrate consistent growth from $25.63 billion in 2019 to $38.69 billion in 2024. This represents a cumulative increase of approximately 51% over the period. The growth trend is relatively steady, with a slightly larger increase between 2020 and 2021 and continued moderate growth thereafter.

Total Assets

Total assets have shown a substantial increase, rising from approximately $13.2 billion in 2019 to $30.8 billion in 2024. This more than doubles the asset base within six years, reflecting possible expansion initiatives, asset acquisitions, or investments. The most significant jump occurred between 2019 and 2020, with subsequent increases at a slower but steady pace.

Total Asset Turnover

The total asset turnover ratio, which indicates the efficiency in utilizing assets to generate sales, declined sharply from 1.94 in 2019 to around 1.22 in 2020. Following this drop, the ratio modestly recovered to approximately 1.3 from 2021 to 2023, maintaining near this level into 2024 at 1.26. Despite the recovery, the ratio remains below the initial 2019 level, suggesting that asset growth outpaced sales growth during this period or efficiency in asset use slightly diminished compared to 2019.

In summary, while the company has achieved robust sales growth and has expanded its asset base considerably, the efficiency of asset utilization has decreased when comparing the start and end of the period. The steady but lower asset turnover ratio post-2020 suggests increased investment in assets that has yet to translate into proportional sales increases, thereby signaling potential areas for operational optimization or time lag in asset productivity realization.

Net Sales

Net sales exhibited a consistent upward trend from 2019 through 2024. Starting at approximately 25.6 billion USD in early 2019, they increased steadily each year, reaching nearly 38.7 billion USD by early 2024. Notably, the largest annual growth occurred between 2020 and 2021, with sales rising by about 6 billion USD, indicating a significant expansion phase during this period. Growth continued at a slower but positive pace thereafter.

Shareholders’ Equity

Shareholders’ equity showed some variability over the examined period. Initially increasing from about 6.4 billion USD in 2019 to a peak of approximately 6.7 billion USD in 2020, equity declined over the next three years, reaching a low near 5.5 billion USD in early 2023. However, there was a rebound in 2024, with equity rising again to nearly 6.7 billion USD. This fluctuation suggests changes in retained earnings, dividend payments, or capital structure adjustments over time.

Equity Turnover

The equity turnover ratio demonstrated an overall increasing trend from 2019 through 2023, reflecting improved efficiency in utilizing shareholders’ equity to generate sales. The ratio rose from 3.99 in 2019 to a peak of 6.83 in 2023. However, in 2024, this ratio decreased to 5.73, indicating a slight reduction in the sales generated per unit of equity compared to the previous year. This may be associated with the increase in shareholders’ equity observed in 2024 or changes in sales growth rate.