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Long-term (Investment) Activity Analysis

Difficulty: Beginner

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


Ratios (Summary)

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

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Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014 Sep 30, 2013 Sep 30, 2012
Net fixed asset turnover 4.60 4.95 6.22 6.45 6.84 6.96
Total asset turnover 0.78 0.67 1.01 1.01 1.00 1.02
Equity turnover 1.75 1.92 2.76 2.42 2.33 2.37

Source: Based on data from Emerson Electric Co. Annual Reports

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 deteriorated from 2015 to 2016 and from 2016 to 2017.
Total asset turnover An activity ratio calculated as total revenue divided by total assets. Emerson Electric Co.'s total asset turnover deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017.
Equity turnover An activity ratio calculated as total revenue divided by shareholders' equity. Emerson Electric Co.'s equity turnover deteriorated from 2015 to 2016 and from 2016 to 2017.

Net Fixed Asset Turnover

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

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Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014 Sep 30, 2013 Sep 30, 2012
Selected Financial Data (USD $ in millions)
Net sales 15,264  14,522  22,304  24,537  24,669  24,412 
Property, plant and equipment, net 3,321  2,931  3,585  3,802  3,605  3,509 
Ratio
Net fixed asset turnover1 4.60 4.95 6.22 6.45 6.84 6.96
Benchmarks
Net Fixed Asset Turnover, Industry
Industrials 2.93 2.90 2.97 2.98 2.94

Source: Based on data from Emerson Electric Co. Annual Reports

2017 Calculations

1 Net fixed asset turnover = Net sales ÷ Property, plant and equipment, net
= 15,264 ÷ 3,321 = 4.60

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 deteriorated from 2015 to 2016 and from 2016 to 2017.

Total Asset Turnover

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

Microsoft Excel LibreOffice Calc
Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014 Sep 30, 2013 Sep 30, 2012
Selected Financial Data (USD $ in millions)
Net sales 15,264  14,522  22,304  24,537  24,669  24,412 
Total assets 19,589  21,743  22,088  24,177  24,711  23,818 
Ratio
Total asset turnover1 0.78 0.67 1.01 1.01 1.00 1.02
Benchmarks
Total Asset Turnover, Industry
Industrials 0.63 0.62 0.58 0.53 0.52

Source: Based on data from Emerson Electric Co. Annual Reports

2017 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 15,264 ÷ 19,589 = 0.78

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 deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017.

Equity Turnover

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

Microsoft Excel LibreOffice Calc
Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014 Sep 30, 2013 Sep 30, 2012
Selected Financial Data (USD $ in millions)
Net sales 15,264  14,522  22,304  24,537  24,669  24,412 
Common stockholders' equity 8,718  7,568  8,081  10,119  10,585  10,295 
Ratio
Equity turnover1 1.75 1.92 2.76 2.42 2.33 2.37
Benchmarks
Equity Turnover, Industry
Industrials 2.81 2.72 2.41 2.15 1.90

Source: Based on data from Emerson Electric Co. Annual Reports

2017 Calculations

1 Equity turnover = Net sales ÷ Common stockholders' equity
= 15,264 ÷ 8,718 = 1.75

Ratio Description The company
Equity turnover An activity ratio calculated as total revenue divided by shareholders' equity. Emerson Electric Co.'s equity turnover deteriorated from 2015 to 2016 and from 2016 to 2017.