Microsoft Excel LibreOffice Calc

Emerson Electric Co. (EMR)

Analysis of Long-term (Investment) Activity Ratios

Difficulty: Beginner

Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.

Long-term Activity Ratios (Summary)

Emerson Electric Co., long-term (investment) activity ratios

Microsoft Excel LibreOffice Calc
Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014 Sep 30, 2013
Net fixed asset turnover 4.89 4.60 4.95 6.22 6.45 6.84
Total asset turnover 0.85 0.78 0.67 1.01 1.01 1.00
Equity turnover 1.95 1.75 1.92 2.76 2.42 2.33

Based on: 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19), 10-K (filing date: 2013-11-19).

Long-term activity ratio Description The company
Net fixed asset turnover An activity ratio calculated as total revenue divided by net fixed assets. Emerson Electric Co.’s net fixed asset turnover ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.
Total asset turnover An activity ratio calculated as total revenue divided by total assets. Emerson Electric Co.’s total asset turnover ratio improved from 2016 to 2017 and from 2017 to 2018.
Equity turnover An activity ratio calculated as total revenue divided by shareholders’ equity. Emerson Electric Co.’s equity turnover ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Net Fixed Asset Turnover

Emerson Electric Co., net fixed asset turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014 Sep 30, 2013
Selected Financial Data (US$ in millions)
Net sales 17,408  15,264  14,522  22,304  24,537  24,669 
Property, plant and equipment, net 3,562  3,321  2,931  3,585  3,802  3,605 
Long-term Activity Ratio
Net fixed asset turnover1 4.89 4.60 4.95 6.22 6.45 6.84
Benchmarks
Net Fixed Asset Turnover, Industry
Industrials 3.06 2.93 2.91 2.97 2.99 —

Based on: 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19), 10-K (filing date: 2013-11-19).

1 2018 Calculation
Net fixed asset turnover = Net sales ÷ Property, plant and equipment, net
= 17,408 ÷ 3,562 = 4.89

Long-term activity ratio Description The company
Net fixed asset turnover An activity ratio calculated as total revenue divided by net fixed assets. Emerson Electric Co.’s net fixed asset turnover ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.

Total Asset Turnover

Emerson Electric Co., total asset turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014 Sep 30, 2013
Selected Financial Data (US$ in millions)
Net sales 17,408  15,264  14,522  22,304  24,537  24,669 
Total assets 20,390  19,589  21,743  22,088  24,177  24,711 
Long-term Activity Ratio
Total asset turnover1 0.85 0.78 0.67 1.01 1.01 1.00
Benchmarks
Total Asset Turnover, Industry
Industrials 0.67 0.63 0.62 0.58 0.53 —

Based on: 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19), 10-K (filing date: 2013-11-19).

1 2018 Calculation
Total asset turnover = Net sales ÷ Total assets
= 17,408 ÷ 20,390 = 0.85

Long-term activity ratio Description The company
Total asset turnover An activity ratio calculated as total revenue divided by total assets. Emerson Electric Co.’s total asset turnover ratio improved from 2016 to 2017 and from 2017 to 2018.

Equity Turnover

Emerson Electric Co., equity turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014 Sep 30, 2013
Selected Financial Data (US$ in millions)
Net sales 17,408  15,264  14,522  22,304  24,537  24,669 
Common stockholders’ equity 8,947  8,718  7,568  8,081  10,119  10,585 
Long-term Activity Ratio
Equity turnover1 1.95 1.75 1.92 2.76 2.42 2.33
Benchmarks
Equity Turnover, Industry
Industrials 3.28 2.81 2.72 2.42 2.15 —

Based on: 10-K (filing date: 2018-11-19), 10-K (filing date: 2017-11-20), 10-K (filing date: 2016-11-16), 10-K (filing date: 2015-11-18), 10-K (filing date: 2014-11-19), 10-K (filing date: 2013-11-19).

1 2018 Calculation
Equity turnover = Net sales ÷ Common stockholders’ equity
= 17,408 ÷ 8,947 = 1.95

Long-term activity ratio Description The company
Equity turnover An activity ratio calculated as total revenue divided by shareholders’ equity. Emerson Electric Co.’s equity turnover ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.