Analysis of Long-term (Investment) Activity Ratios
Quarterly Data
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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- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value (EV)
- Selected Financial Data since 2005
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Total Asset Turnover since 2005
- Price to Book Value (P/BV) since 2005
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Long-term Activity Ratios (Summary)
Ecolab Inc., long-term (investment) activity ratios (quarterly data)
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibits moderate stability from early 2018 through 2019, fluctuating within a narrow range around 3.7 to 3.85. A noticeable decline occurs in the first quarter of 2020, dropping to 3.68, followed by a recovery in mid-2020 peaking at 4.25. Subsequently, the ratio experiences a gradual decline again towards the end of 2021, ending at 3.87. This indicates a general maintenance of asset efficiency with some temporary disruptions and recovery phases.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- When considering operating leases and right-of-use assets, the turnover ratio displays a downward trend starting in early 2019, decreasing from 3.3 to a low of 3.22 by the end of the first quarter in 2020. A partial rebound occurs mid-2020, reaching 3.73, followed by variability but remaining below earlier 2018 levels and ending at 3.46 in late 2021. This suggest the inclusion of lease assets has consistently reduced turnover efficiency measures and introduced increased volatility post-2018.
- Total Asset Turnover
- Total asset turnover remains relatively stable around 0.7 to 0.73 throughout 2018 and 2019, indicating consistent utilization of total assets for revenue generation. However, starting in early 2020, the ratio drops sharply to 0.65 with a further decline to 0.6 by the end of 2021, despite brief intervals of moderate recovery. The sustained decrease after 2019 suggests diminished efficiency in generating sales from total assets, likely influenced by changing business conditions or asset structure.
- Equity Turnover
- Equity turnover presents fluctuations, beginning near 1.86 in early 2018 and declining to approximately 1.72 by the end of 2019. A strong rebound transpires in the first half of 2020, peaking at 2.28, possibly reflecting changes in equity or sales performance. Following this peak, a steady decline is observed through 2021, settling around 1.76. The volatility suggests variable performance in the utilization of shareholders’ equity to generate sales, with significant short-term improvements during 2020 followed by normalization.
Net Fixed Asset Turnover
Ecolab Inc., net fixed asset turnover calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Net sales | |||||||||||||||||||||
| Property, plant and equipment, net | |||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||
| Net fixed asset turnover1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Net Fixed Asset Turnover, Competitors2 | |||||||||||||||||||||
| Linde plc | |||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q4 2021 Calculation
Net fixed asset turnover
= (Net salesQ4 2021
+ Net salesQ3 2021
+ Net salesQ2 2021
+ Net salesQ1 2021)
÷ Property, plant and equipment, net
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the financial data reveals several key trends over the observed periods, particularly in net sales, property, plant and equipment (PP&E), and net fixed asset turnover ratio.
- Net Sales
- Net sales exhibited a generally fluctuating pattern with distinct phases. Starting from approximately $3.47 billion in early 2018, there was an upward trajectory reaching a peak near $3.83 billion by the end of 2019. However, in 2020, there was a considerable decline, with net sales dropping to a low of about $2.69 billion mid-year, reflecting potential challenges during this period. Recovery signs appear in 2021 as sales rebounded, reaching above $3.36 billion by year-end, though still displaying some volatility.
- Property, Plant, and Equipment, Net (PP&E)
- The net value of PP&E remained relatively stable with minor fluctuations from 2018 through early 2020, mostly in the range of $3.75 to $3.95 billion. A marked decline occurred during 2020, where the value decreased notably to around $3.13 billion mid-year, suggesting asset disposals, impairments, or revaluations. In 2021, the PP&E base stabilized somewhat but remained below previous peak levels, ending the period at approximately $3.29 billion.
- Net Fixed Asset Turnover Ratio
- This ratio, indicative of how efficiently the company utilizes its fixed assets to generate sales, generally hovered between 3.7 and 3.9 during 2018 and 2019 with minor oscillations. Interestingly, despite the drop in PP&E in 2020, the turnover ratio increased, peaking at 4.25 mid-year 2020, which can be interpreted as higher efficiency or increased sales relative to assets during a difficult sales environment. The ratio then moderately declined but maintained levels near the 3.8 to 4.05 range through 2021, reflecting stable asset utilization efficiency despite fluctuating sales and asset base.
In summary, the data indicate that the company experienced a sales peak prior to the 2020 downturn, accompanied by a reduction in fixed assets and a temporary increase in asset utilization efficiency. The subsequent recovery phase in 2021 suggests responsiveness to external conditions with improving sales and consistent efficiency in capital use, although the overall asset base remains lower than pre-2020 levels.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Ecolab Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Net sales | |||||||||||||||||||||
| Property, plant and equipment, net | |||||||||||||||||||||
| Operating lease 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 | |||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q4 2021 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset)
= (Net salesQ4 2021
+ Net salesQ3 2021
+ Net salesQ2 2021
+ Net salesQ1 2021)
÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales
-
Net sales demonstrate a fluctuating trend across the observed periods. Initially, there is a gradual increase from March 2018 through December 2018, peaking around 3,760,500 thousand USD. This is followed by a slight decline into the first quarter of 2019, with values stabilizing in the subsequent quarters of 2019. A significant downturn occurs beginning in the first quarter of 2020, with net sales falling sharply to a low of 2,685,700 thousand USD in June 2020. After mid-2020, net sales exhibit a recovery trend, though they remain below pre-2020 levels by the end of 2021.
- Property, Plant and Equipment, Net (Including Operating Lease, Right-of-Use Asset)
-
The net value of property, plant, and equipment shows moderate variation over time. Starting slightly below 3,780,000 thousand USD in early 2018, there is a noticeable increase through 2019, reaching its highest point at approximately 4,532,400 thousand USD at year-end 2019. Subsequently, a marked decrease occurs in 2020, coinciding with the dip in net sales, descending to approximately 3,548,700 thousand USD by December 2020. In 2021, values generally stabilize, with a slight uptick noted in the final quarter, but remaining below the 2019 peak.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
-
The net fixed asset turnover ratio reflects efficiency in utilizing fixed assets to generate sales. The ratio remains relatively stable during 2018, generally around 3.7 to 3.85. However, during 2019, this ratio declines to a low of approximately 3.29, indicating a decrease in asset turnover efficiency, likely influenced by increased asset base without a commensurate rise in sales. In 2020, there is a partial rebound with the ratio improving to around 3.73 in the second quarter, before decreasing again later in the year. The year 2021 shows fluctuating improvement, with the ratio increasing to a peak near 3.61 and then slightly easing, suggesting gradual optimization of asset utilization post the downturn.
- Overall Insights
-
The data reflect a business impacted by external factors leading to a noticeable decline in sales and asset values during the 2020 period, likely indicative of challenging market conditions. Recovery in net sales and enhanced fixed asset turnover towards late 2020 and through 2021 implies adaptive operational adjustments. The fluctuations in property, plant, and equipment values further suggest strategic asset management in response to changing business volumes. Continued monitoring of asset turnover ratios alongside sales trends will be crucial to evaluate the efficiency of capital deployment in the recovery phase.
Total Asset Turnover
Ecolab Inc., total asset turnover calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Net sales | |||||||||||||||||||||
| Total assets | |||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||
| Total asset turnover1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Total Asset Turnover, Competitors2 | |||||||||||||||||||||
| Linde plc | |||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q4 2021 Calculation
Total asset turnover
= (Net salesQ4 2021
+ Net salesQ3 2021
+ Net salesQ2 2021
+ Net salesQ1 2021)
÷ Total assets
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales demonstrated a generally stable pattern throughout 2018, with figures fluctuating slightly but remaining close to the 3.7 million USD mark. In 2019, sales initially declined at the start of the year but recovered and even surpassed previous highs by the end of the year. However, 2020 saw a significant decline in net sales, with the lowest points recorded in the second quarter, reflecting a challenging period. Sales began to recover gradually in the latter half of 2020 and continued this upward trend into 2021, though still not reaching the peak levels seen before 2020.
- Total Assets
- Total assets showed relative stability in 2018 and 2019, generally maintaining values around 20 billion USD. There was a noticeable increase in assets during the first quarter of 2020, reaching over 22 billion USD, followed by an unexpected sharp drop in the subsequent quarters of 2020 to around 18 billion USD. Asset levels remained volatile throughout 2021, with some recovery but fluctuating significantly quarter by quarter.
- Total Asset Turnover
- The total asset turnover ratio, which measures the efficiency of asset use in generating sales, began around 0.7 in 2018 and remained steady through 2019, indicating consistent asset utilization. In 2020, the ratio exhibited increased volatility, dropping to as low as 0.6 by the fourth quarter. Despite some recovery attempts, the ratio did not return to the previous steady levels by the end of 2021. The variation suggests challenges in maintaining asset utilization efficiency amid the fluctuating sales and asset base.
Equity Turnover
Ecolab Inc., equity turnover calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Net sales | |||||||||||||||||||||
| Total Ecolab shareholders’ equity | |||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||
| Equity turnover1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Equity Turnover, Competitors2 | |||||||||||||||||||||
| Linde plc | |||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q4 2021 Calculation
Equity turnover
= (Net salesQ4 2021
+ Net salesQ3 2021
+ Net salesQ2 2021
+ Net salesQ1 2021)
÷ Total Ecolab shareholders’ equity
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales
-
Net sales exhibited moderate volatility over the reported periods. From March 2018 to December 2019, net sales fluctuated within a range of approximately 3.47 billion to 3.83 billion US dollars, showing a general upward trend with slight seasonal variations. However, starting in March 2020, there was a notable decline to around 3.02 billion, followed by a further decrease to 2.69 billion US dollars by June 2020, reflecting a significant dip potentially related to external market conditions. Subsequently, net sales showed a recovery trajectory, climbing back to approximately 3.36 billion by December 2021, yet they did not return to pre-2020 peak levels within this time frame.
- Total Shareholders' Equity
-
Shareholders’ equity demonstrated a generally increasing trend throughout the period. From March 2018 through December 2019, equity rose steadily from about 7.6 billion to 8.69 billion US dollars. A sharp decline was observed in June 2020, dropping to roughly 5.86 billion, which might suggest significant financial adjustments or impacts. A recovery then ensued, with equity values incrementally increasing to approximately 7.22 billion by December 2021, recovering much of the earlier loss but still below the peak prior to mid-2020.
- Equity Turnover Ratio
-
The equity turnover ratio, indicating the efficiency of generating sales from shareholders’ equity, showed variable patterns. Initially, from March 2018 to December 2019, the ratio remained relatively stable around 1.72 to 1.86. Starting in March 2020, the ratio experienced a notable uptick, peaking at 2.28 in June 2020, which reflects an increased ability to generate sales relative to equity despite the concurrent dip in both absolute sales and equity values. Afterwards, the ratio gradually declined, aligning closer to previous levels, settling around 1.76 by December 2021.
- Summary of Trends and Insights
-
The data reflect a period of resilience following an evident downturn around early to mid-2020, likely due to challenging economic conditions affecting both sales and equity. While net sales and equity both experienced sharp declines, the equity turnover ratio increased temporarily, suggesting improved capital efficiency during that time. Post-2020, the gradual recovery trend in both sales and equity signals the company’s efforts to stabilize and grow its financial position. However, by the end of 2021, neither net sales nor shareholders' equity had fully returned to their previous peaks.