Analysis of Geographic Areas
EMC Corp. operates in 2 regions: United States and International.
Area Asset Turnover
EMC Corp., asset turnover by geographic area
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| United States | 2.91 | 2.93 | 2.76 | 2.88 | 2.91 |
| International | 10.77 | 11.37 | 12.53 | 14.62 | 15.34 |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
An analysis of asset turnover by geographic area reveals divergent efficiency trends between the domestic and international markets from 2011 to 2015.
- United States Asset Turnover
- The domestic market demonstrated significant stability in asset utilization throughout the period. The ratio remained within a narrow range, starting at 2.91 in 2011 and ending at 2.91 in 2015. A minor fluctuation occurred between 2012 and 2014, reaching a low of 2.76 in 2013 before recovering to 2.93 in 2014, indicating a consistent capacity to generate revenue from the domestic asset base.
- International Asset Turnover
- A sustained downward trend is observed in the international segment. The turnover ratio declined consecutively each year, falling from a peak of 15.34 in 2011 to 10.77 by the end of 2015. This consistent year-over-year decrease suggests a reduction in the efficiency with which international assets are being utilized to drive revenue.
- Comparative Regional Performance
- A stark contrast exists between the two regions. Although the international asset turnover remains substantially higher than that of the United States, the gap between the two has narrowed significantly over the five-year window. The stability of the US operations contrasts with the eroding efficiency of the international operations, where the asset turnover ratio decreased by approximately 29.8% over the analyzed period.
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Area Asset Turnover: United States
EMC Corp.; United States; area asset turnover calculation
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues | 13,361) | 12,835) | 12,230) | 11,510) | 10,550) |
| Long-lived assets | 4,584) | 4,380) | 4,433) | 3,994) | 3,623) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 2.91 | 2.93 | 2.76 | 2.88 | 2.91 |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Area asset turnover = Revenues ÷ Long-lived assets
= 13,361 ÷ 4,584 = 2.91
Between 2011 and 2015, a consistent upward trajectory in revenues within the United States was observed, accompanied by a general increase in the long-lived asset base. Despite these changes in scale, the asset turnover ratio remained relatively stable, indicating a disciplined relationship between asset investment and revenue generation.
- Revenue Performance
- Revenues grew steadily each year, rising from 10,550 million US dollars in 2011 to 13,361 million US dollars in 2015. This represents a cumulative increase of approximately 26.6% over the analyzed five-year period.
- Long-Lived Asset Trends
- Long-lived assets generally expanded from 3,623 million US dollars in 2011 to 4,584 million US dollars in 2015. A minor contraction occurred in 2014, where assets decreased to 4,380 million US dollars from a peak of 4,433 million US dollars in 2013.
- Area Asset Turnover Analysis
- The asset turnover ratio exhibited minimal volatility, fluctuating within a narrow range between 2.76 and 2.93. A gradual decline was noted from 2011 (2.91) to 2013 (2.76), coinciding with a period of rapid asset expansion. Operational efficiency peaked in 2014 at 2.93, driven by the combination of sustained revenue growth and a slight reduction in the long-lived asset base. By 2015, the ratio returned to 2.91, matching the 2011 baseline despite the significantly higher absolute values of both revenue and assets.
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Area Asset Turnover: International
EMC Corp.; International; area asset turnover calculation
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues | 11,343) | 11,605) | 10,992) | 10,204) | 9,458) |
| Long-lived assets | 1,053) | 1,021) | 877) | 698) | 617) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 10.77 | 11.37 | 12.53 | 14.62 | 15.34 |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Area asset turnover = Revenues ÷ Long-lived assets
= 11,343 ÷ 1,053 = 10.77
Between 2011 and 2015, the international segment experienced a consistent decline in asset utilization efficiency. While revenue grew for the majority of the period, the rate of investment in long-lived assets significantly outpaced revenue growth, leading to a steady compression of the area asset turnover ratio.
- Revenue Trends
- International revenues demonstrated a general upward trajectory from 2011 to 2014, rising from 9,458 million USD to a peak of 11,605 million USD. However, this growth trend reversed in 2015, with revenues decreasing to 11,343 million USD, marking a slight contraction in market performance.
- Long-Lived Asset Expansion
- There was a continuous and aggressive increase in long-lived assets over the five-year period. Assets rose from 617 million USD in 2011 to 1,053 million USD in 2015, representing a total increase of approximately 70.7%. This indicates a sustained capital investment strategy within international markets.
- Area Asset Turnover Efficiency
- The area asset turnover ratio declined every year, falling from 15.34 in 2011 to 10.77 in 2015. This downward trend confirms that the incremental investment in long-lived assets did not generate a proportional increase in revenue. The efficiency of asset deployment diminished most notably between 2012 and 2013, where the ratio dropped from 14.62 to 12.53, and continued to erode as revenues stagnated while assets continued to grow in 2015.
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Revenues
EMC Corp., revenues by geographic area
US$ in millions
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| United States | 13,361) | 12,835) | 12,230) | 11,510) | 10,550) |
| International | 11,343) | 11,605) | 10,992) | 10,204) | 9,458) |
| Total | 24,704) | 24,440) | 23,222) | 21,714) | 20,008) |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
Total revenues exhibited a consistent upward trajectory from 2011 to 2015, increasing from $20,008 million to $24,704 million. This expansion was primarily supported by steady growth in the United States market, whereas international revenues experienced a period of growth followed by a slight contraction in the final year of the analysis.
- United States Revenue Growth
- Domestic revenues demonstrated uninterrupted year-over-year growth, rising from $10,550 million in 2011 to $13,361 million in 2015. This represents a cumulative increase of approximately 26.6% over the five-year period, establishing the domestic market as a stable and primary driver of top-line expansion.
- International Revenue Trends
- International revenues grew from $9,458 million in 2011 to a peak of $11,605 million in 2014. A reversal in this trend occurred in 2015, where revenues declined to $11,343 million. Despite this late-period decrease, international revenues remained approximately 19.9% higher in 2015 than they were in 2011.
- Geographic Revenue Composition
- The revenue mix shifted slightly toward a higher concentration of domestic sales. The United States' contribution to total revenue increased from 52.7% in 2011 to 54.1% in 2015. This trend indicates that domestic market growth outpaced international growth, particularly during the 2014-2015 interval.
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Long-lived assets
EMC Corp., long-lived assets by geographic area
US$ in millions
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| United States | 4,584) | 4,380) | 4,433) | 3,994) | 3,623) |
| International | 1,053) | 1,021) | 877) | 698) | 617) |
| Total | 5,637) | 5,401) | 5,310) | 4,692) | 4,239) |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
Total long-lived assets exhibited a consistent upward trajectory from December 31, 2011, through December 31, 2015, growing from 4,239 million US$ to 5,637 million US$. This represents an overall increase of approximately 33% over the five-year period, indicating a sustained expansion of the asset base.
- Domestic Asset Trends
- Long-lived assets within the United States grew from 3,623 million US$ in 2011 to 4,584 million US$ in 2015. While the general trend was positive, a marginal contraction occurred between 2013 and 2014, where assets decreased from 4,433 million US$ to 4,380 million US$, before recovering in 2015.
- International Asset Growth
- International long-lived assets demonstrated more aggressive relative growth compared to domestic assets. Starting at 617 million US$ in 2011, these assets rose steadily each year to reach 1,053 million US$ by 2015. This reflects a growth rate of approximately 70.6% over the analyzed period.
- Geographic Concentration and Diversification
- The composition of long-lived assets shifted toward greater internationalization. In 2011, United States assets accounted for approximately 85.5% of the total asset base. By 2015, this concentration decreased to approximately 81.3%, as the international segment's share grew from 14.5% to 18.7%. This pattern suggests a strategic increase in investment within non-domestic markets.
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