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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- Statement of Comprehensive Income
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Long-term Activity Ratios (Summary)
Emerson Electric Co., long-term (investment) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibits a declining trend from 6.75 at the end of 2014 to a low of 4.47 in mid-2017, indicating a gradual reduction in the efficiency with which the company utilized its fixed assets to generate sales. Following this trough, there is a moderate recovery trend, with the ratio rising to approximately 5.06 by early 2020. However, the ratio remains below the levels observed in 2014 and early 2015, suggesting sustained lower efficiency or possible changes in asset base or sales composition.
- Total Asset Turnover
- The total asset turnover ratio fluctuates within a narrower range but generally follows a downward trend from just above 1.0 at the end of 2014 to a low near 0.67 in late 2016. Post-2016, the ratio demonstrates some recovery, moving back toward the 0.85 to 0.90 range by late 2019 and early 2020. Despite such recovery, the asset turnover at the end of the examined period remains below the early years, indicating either asset growth outpacing sales growth or reduced overall asset use efficiency.
- Equity Turnover
- The equity turnover ratio shows a noticeable decline beginning near 2.58 at the end of 2014 to a minimum of approximately 1.75 by late 2017. After this point, the ratio generally trends upward, reaching about 2.39 in the first quarter of 2020. This pattern implies that while there was a weakening in the efficiency of equity usage to generate revenue in the intervening years, the company improved its equity utilization in the latter periods of the data set, potentially reflecting better capital management or sales growth relative to equity.
- Overall Analysis
- Across the three turnover metrics, there is a consistent pattern of decline in asset and equity efficiency from 2014 through around 2016-2017, followed by a moderate recovery trend. This could suggest a period of adjustment or investment that temporarily dampened turnover ratios, succeeded by operational improvements or sales growth that enhanced turnover metrics. Nonetheless, compared to the early period, the ratios at the end of the analyzed timeframe generally remain slightly lower or only partially recovered, hinting at changed operational or financial dynamics over the years.
Net Fixed Asset Turnover
Emerson Electric Co., net fixed asset turnover calculation (quarterly data)
| 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 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||||||
| Property, plant and equipment, net | |||||||||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||||||
| Net fixed asset turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Net Fixed Asset Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
1 Q2 2020 Calculation
Net fixed asset turnover
= (Net salesQ2 2020
+ Net salesQ1 2020
+ Net salesQ4 2019
+ Net salesQ3 2019)
÷ Property, plant and equipment, net
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales
-
The net sales exhibit a fluctuating pattern over the observed periods. Initially, from late 2014 through the first three quarters of 2015, net sales remain relatively stable, ranging between approximately 5,400 and 5,800 million US dollars. However, a significant decline is evident at the end of 2015, with sales dropping sharply to around 3,337 million. This lower sales level persists with some recovery and fluctuations through 2016 to 2020, generally oscillating between 3,200 and 5,000 million. Notable upticks occur in the second half of 2017 and 2018, but overall, net sales do not return to the peak levels seen in early 2015. By the first quarter of 2020, the sales figure remains relatively modest compared to the initial periods, suggesting no sustained recovery to earlier highs.
- Property, Plant and Equipment, Net
-
The net value of property, plant, and equipment demonstrates a relatively stable trend with minor fluctuations throughout the timeline. Beginning at about 3,631 million US dollars at the end of 2014, the figure marginally decreases and fluctuates around the 3,500 million mark over the years. A temporary decline is observed around the third quarter of 2016 and continues through 2017, dropping below 3,300 million. Subsequently, a gradual increase is noted in 2018 and 2019, peaking near 3,642 million, followed by a slight reduction by early 2020. Overall, the changes are moderate and do not indicate major capital expenditure shifts or disposals but rather reflect maintenance or incremental adjustments in asset base.
- Net Fixed Asset Turnover
-
The net fixed asset turnover ratio experiences a clear downward trend from late 2014 to mid-2016, decreasing from approximately 6.75 to a low near 4.47, indicating declining efficiency in using fixed assets to generate sales. From mid-2016 onward, the ratio stabilizes and then gradually improves, oscillating around 5.0 to 5.2 in the 2017 and 2018 periods, signaling some recovery in asset utilization. In 2019 and early 2020, the ratio remains steady near 5.0, suggesting a maintained level of turnover efficiency. This pattern implies that despite fluctuations in net sales and asset base, the company managed to improve and then sustain better use of its fixed assets over time compared to the mid-2016 low point.
- Overall Insights
-
The data reflects a period of volatility in net sales accompanied by relative stability in the asset base. The sharp sales decline around late 2015 might point to specific external or internal factors impacting demand or operations. While the asset base did not undergo dramatic changes, efficient use of fixed assets suffered initially but rebounded and plateaued in later years. This suggests adaptive measures or operational improvements following the sales downturn. Nonetheless, net sales recovery remained incomplete, indicating challenges in market conditions or competitive positioning during this timeframe.
Total Asset Turnover
Emerson Electric Co., total asset turnover calculation (quarterly data)
| 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 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||||||
| Total asset turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Total Asset Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
1 Q2 2020 Calculation
Total asset turnover
= (Net salesQ2 2020
+ Net salesQ1 2020
+ Net salesQ4 2019
+ Net salesQ3 2019)
÷ Total assets
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The quarterly financial data exhibits notable fluctuations and evolving trends in net sales, total assets, and total asset turnover over the observed periods.
- Net Sales
- Net sales demonstrate a variable pattern, with several peaks and troughs throughout the periods. Initially, sales remain in the range of approximately $5,400 million to $5,800 million from late 2014 through late 2015, except for a significant dip in December 2015 to $3,337 million. Following this trough, there is a gradual recovery to above $4,000 million by late 2017 and a general upward trajectory thereafter, reaching nearly $5,000 million in late 2019. The early months of 2020, however, show a slight decline again to around $4,160 million. This pattern suggests some seasonality or external factors impacting sales volumes, with a recovery trend evident after the mid-period low.
- Total Assets
- Total assets decrease steadily from approximately $23,700 million at the end of 2014 to a low of around $17,300 million by early 2017. Post this decline, assets gradually increase again, stabilizing around $20,000 million to $21,700 million towards early 2020. This trend indicates the company may have undertaken asset divestitures or experienced write-downs in the earlier periods, followed by asset accumulation or revaluation in the later periods, reflecting strategic asset management or investments.
- Total Asset Turnover
- The total asset turnover ratio starts slightly above 1.0 in late 2014, indicating efficient use of assets to generate sales. This ratio declines over the subsequent years, reaching a low point near 0.67 by late 2016. After this, the ratio recovers gradually, fluctuating between 0.8 and 0.9 from 2017 onward, with a minor dip again around early 2020. The decline in the ratio during the mid-period aligns with the reduction in net sales and/or increased assets, while the recovery suggests improved efficiency in asset utilization in generating revenue during the latter periods.
Overall, the data reflects a cycle of decreased asset base and sales accompanied by reduced turnover efficiency in the mid-period, followed by a gradual restoration of asset size, improved sales figures, and enhanced asset turnover ratios, although the early 2020 data hints at a minor setback. These trends could be indicative of strategic restructuring phases and market environment adjustments affecting operational performance.
Equity Turnover
Emerson Electric Co., equity turnover calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||||||
| Common stockholders’ equity | |||||||||||||||||||||||||||||
| Long-term Activity Ratio | |||||||||||||||||||||||||||||
| Equity turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Equity Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-K (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-K (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-K (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-K (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-Q (reporting date: 2015-12-31), 10-K (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-Q (reporting date: 2014-12-31).
1 Q2 2020 Calculation
Equity turnover
= (Net salesQ2 2020
+ Net salesQ1 2020
+ Net salesQ4 2019
+ Net salesQ3 2019)
÷ Common stockholders’ equity
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Sales
- The net sales exhibit noticeable fluctuations over the observed periods. From late 2014 through early 2015, sales maintained a relatively stable range between approximately $5,400 million and $5,800 million. However, starting from the fourth quarter of 2015, a significant decline occurs, with sales dropping to around $3,337 million. Following this decline, net sales show a cyclical pattern with periodic upticks and declines, generally ranging between $3,200 million and $4,900 million through early 2020. Despite occasional recoveries in some quarters, the overall sales levels in 2019 and early 2020 appear subdued compared to peak values in 2014 and early 2015.
- Common Stockholders’ Equity
- The common stockholders’ equity demonstrates a declining trend from the end of 2014 through the end of 2015, falling from $9,513 million to $7,456 million. Subsequently, the equity levels experience moderate fluctuation without a clear upward or downward long-term trend, with values oscillating generally between $7,400 million and $8,900 million over the next several years. Toward the end of the period, at the start of 2020, there is a noticeable dip to approximately $7,517 million, marking one of the lower points in the series.
- Equity Turnover
- Equity turnover ratios start at relatively high levels near 2.58 to 2.76 in 2014 and early 2015, indicating a strong efficiency in utilizing equity to generate sales during those periods. From mid-2015, a declining trend is apparent, with the ratio falling to below 2.0 by late 2016, signaling reduced efficiency or possibly reflecting changes in either sales or equity levels. Through 2017 and up to mid-2018, equity turnover remains relatively stable but at lower levels than earlier, fluctuating around 1.75 to 2.02. Starting from late 2018, the ratio shows a gradual increase, reaching up to 2.39 by early 2020, suggesting a recovery in equity utilization efficiency in the later periods.
- Overall Analysis
- The data reveals a period of financial adjustment beginning in late 2015, marked by a considerable reduction in net sales and common equity. This is accompanied by a decrease in equity turnover, implying challenges in maintaining sales volume or generating returns on equity at previous levels. Despite these challenges, there is evidence of operational recovery or improved efficiency in more recent quarters as equity turnover ratios trend upward and net sales show partial rebounds. Nevertheless, equity levels remain below earlier highs, indicating ongoing capital structure considerations or shareholder equity fluctuations. These trends warrant monitoring to assess whether improvements in turnover can be sustained and translated into consistent sales growth and stronger equity positions.