Analysis of Long-term (Investment) Activity Ratios
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)
Johnson Controls International plc, long-term (investment) activity ratios
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
The analysis of investment activity ratios over the six-year period from 2018 to 2023 reveals a general trend toward improved asset efficiency, particularly concerning fixed assets and equity utilization, despite some volatility in lease-adjusted metrics and overall asset turnover.
- Net Fixed Asset Turnover
- A strong and consistent upward trend is observed, with the ratio increasing from 5.09 in 2018 to 8.54 in 2023. This progression indicates a significant improvement in the company's ability to generate revenue from its net fixed assets.
- Net Fixed Asset Turnover (including operating lease, right-of-use asset)
- This metric exhibits greater volatility compared to the standard fixed asset turnover. After an initial increase to 7.16 in 2019, the ratio declined to 5.14 by 2021 before recovering to 5.92 in 2023. The gap between this figure and the standard fixed asset turnover reflects the impact of right-of-use assets on the efficiency calculation.
- Total Asset Turnover
- Total asset utilization remained relatively stable, characterized by a slight U-shaped pattern. The ratio declined from 0.64 in 2018 to a low of 0.55 in 2020, followed by a steady recovery to 0.63 by 2023, suggesting that overall asset efficiency has returned to near-2018 levels.
- Equity Turnover
- Equity efficiency experienced an initial contraction, dropping from 1.48 in 2018 to 1.21 in 2019. However, a sustained recovery followed, with the ratio climbing annually to reach 1.62 by 2023, indicating an increased capacity to generate sales relative to the equity invested in the business.
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Net Fixed Asset Turnover
Johnson Controls International plc, net fixed asset turnover calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net sales | 26,793) | 25,299) | 23,668) | 22,317) | 23,968) | 31,400) | |
| Property, plant and equipment, net | 3,136) | 3,042) | 3,228) | 3,059) | 3,348) | 6,171) | |
| Long-term Activity Ratio | |||||||
| Net fixed asset turnover1 | 8.54 | 8.32 | 7.33 | 7.30 | 7.16 | 5.09 | |
| Benchmarks | |||||||
| Net Fixed Asset Turnover, Competitors2 | |||||||
| Boeing Co. | 7.30 | 6.31 | 5.70 | — | — | — | |
| Caterpillar Inc. | 5.04 | 4.70 | 3.99 | — | — | — | |
| Eaton Corp. plc | 6.57 | 6.59 | 6.41 | — | — | — | |
| GE Aerospace | 6.06 | 5.96 | 5.47 | — | — | — | |
| Honeywell International Inc. | 6.48 | 6.48 | 6.18 | — | — | — | |
| Lockheed Martin Corp. | 8.07 | 8.27 | 8.83 | — | — | — | |
| RTX Corp. | 4.38 | 4.42 | 4.30 | — | — | — | |
| Net Fixed Asset Turnover, Sector | |||||||
| Capital Goods | 5.98 | 5.79 | 5.46 | — | — | — | |
| Net Fixed Asset Turnover, Industry | |||||||
| Industrials | 2.86 | 2.94 | 2.72 | — | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Net fixed asset turnover = Net sales ÷ Property, plant and equipment, net
= 26,793 ÷ 3,136 = 8.54
2 Click competitor name to see calculations.
Between the fiscal years 2018 and 2023, a significant improvement in asset utilization efficiency is observed. The net fixed asset turnover ratio increased consistently from 5.09 in 2018 to 8.54 in 2023, indicating a substantial growth in the organization's ability to generate revenue from its investment in property, plant, and equipment.
- Net Sales Trends
- Revenue experienced a sharp decline between 2018 and 2020, falling from US$ 31,400 million to a low of US$ 22,317 million. However, a steady recovery phase followed, with sales climbing annually from 2021 through 2023, reaching US$ 26,793 million by the end of the period. Despite this recovery, revenue remained below the 2018 baseline.
- Net Property, Plant and Equipment (PP&E) Evolution
- A dramatic reduction in the net fixed asset base occurred between 2018 and 2019, where the value dropped from US$ 6,171 million to US$ 3,348 million. Following this initial contraction, the net PP&E remained relatively stable, fluctuating within a narrow range between US$ 3,042 million and US$ 3,228 million over the subsequent four years.
- Net Fixed Asset Turnover Analysis
- The upward trajectory of the turnover ratio was primarily catalyzed by the significant divestment or depreciation of fixed assets in 2019. The ratio jumped from 5.09 to 7.16 in a single year and continued to rise as the asset base remained lean while sales began to recover. The progression to 8.54 by 2023 suggests a shift toward a more asset-light operational model, achieving higher productivity from a smaller investment in physical infrastructure.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Johnson Controls International plc, net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net sales | 26,793) | 25,299) | 23,668) | 22,317) | 23,968) | 31,400) | |
| Property, plant and equipment, net | 3,136) | 3,042) | 3,228) | 3,059) | 3,348) | 6,171) | |
| Operating lease right-of-use assets (included in Other noncurrent assets) | 1,389) | 1,271) | 1,376) | 1,190) | —) | —) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 4,525) | 4,313) | 4,604) | 4,249) | 3,348) | 6,171) | |
| Long-term Activity Ratio | |||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 5.92 | 5.87 | 5.14 | 5.25 | 7.16 | 5.09 | |
| Benchmarks | |||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | |||||||
| Boeing Co. | 6.30 | 5.55 | 5.04 | — | — | — | |
| Caterpillar Inc. | 4.83 | 4.49 | 3.79 | — | — | — | |
| Eaton Corp. plc | 5.55 | 5.58 | 5.60 | — | — | — | |
| GE Aerospace | 5.17 | 5.08 | 4.55 | — | — | — | |
| Honeywell International Inc. | 5.50 | 5.58 | 5.28 | — | — | — | |
| Lockheed Martin Corp. | 7.14 | 7.27 | 7.54 | — | — | — | |
| RTX Corp. | 3.96 | 3.95 | 3.80 | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | |||||||
| Capital Goods | 5.31 | 5.13 | 4.80 | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | |||||||
| Industrials | 2.49 | 2.54 | 2.34 | — | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Net sales ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= 26,793 ÷ 4,525 = 5.92
2 Click competitor name to see calculations.
The analysis of investment activity indicates a period of significant volatility in asset utilization and revenue generation between 2018 and 2023. The overall trend is characterized by a sharp contraction in the asset base and sales in the early part of the period, followed by a steady recovery in revenue and a stabilization of fixed asset efficiency.
- Net Sales Performance
- A substantial decline in net sales occurred between September 30, 2018, and September 30, 2020, falling from 31,400 million US$ to 22,317 million US$. Following this trough, a consistent recovery trend is observed, with sales increasing annually to reach 26,793 million US$ by September 30, 2023. Despite this recovery, revenue remained below 2018 levels at the end of the analyzed period.
- Fixed Asset Base Evolution
- Net property, plant, and equipment, including right-of-use assets, underwent a sharp reduction in 2019, decreasing from 6,171 million US$ to 3,348 million US$. This was followed by a period of moderate growth and stabilization, with the asset base fluctuating between 4,249 million US$ and 4,604 million US$ from 2020 through 2023, ending at 4,525 million US$. This suggests a strategic realignment or divestment of fixed assets early in the period.
- Net Fixed Asset Turnover Efficiency
- The net fixed asset turnover ratio exhibited significant fluctuation, peaking at 7.16 in 2019. This peak was primarily driven by the aggressive reduction in the asset base rather than an increase in sales. Subsequently, the ratio corrected to 5.25 in 2020 and 5.14 in 2021. Since 2021, there has been a gradual improvement in asset productivity, with the ratio rising to 5.87 in 2022 and 5.92 in 2023, reflecting a positive correlation between recovering sales and a stable asset base.
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Total Asset Turnover
Johnson Controls International plc, total asset turnover calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net sales | 26,793) | 25,299) | 23,668) | 22,317) | 23,968) | 31,400) | |
| Total assets | 42,242) | 42,158) | 41,890) | 40,815) | 42,287) | 48,797) | |
| Long-term Activity Ratio | |||||||
| Total asset turnover1 | 0.63 | 0.60 | 0.57 | 0.55 | 0.57 | 0.64 | |
| Benchmarks | |||||||
| Total Asset Turnover, Competitors2 | |||||||
| Boeing Co. | 0.57 | 0.49 | 0.45 | — | — | — | |
| Caterpillar Inc. | 0.73 | 0.69 | 0.58 | — | — | — | |
| Eaton Corp. plc | 0.60 | 0.59 | 0.58 | — | — | — | |
| GE Aerospace | 0.40 | 0.39 | 0.36 | — | — | — | |
| Honeywell International Inc. | 0.60 | 0.57 | 0.53 | — | — | — | |
| Lockheed Martin Corp. | 1.29 | 1.25 | 1.32 | — | — | — | |
| RTX Corp. | 0.43 | 0.42 | 0.40 | — | — | — | |
| Total Asset Turnover, Sector | |||||||
| Capital Goods | 0.57 | 0.54 | 0.50 | — | — | — | |
| Total Asset Turnover, Industry | |||||||
| Industrials | 0.67 | 0.66 | 0.58 | — | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Total asset turnover = Net sales ÷ Total assets
= 26,793 ÷ 42,242 = 0.63
2 Click competitor name to see calculations.
The efficiency of asset utilization exhibits a cyclical trajectory between 2018 and 2023, characterized by an initial contraction followed by a sustained recovery phase.
- Net Sales Trends
- A significant contraction in revenue occurred between 2018 and 2020, with net sales falling from US$ 31,400 million to US$ 22,317 million. Subsequently, a consistent upward trend was established, with sales increasing annually to reach US$ 26,793 million by September 30, 2023.
- Asset Base Evolution
- Total assets decreased substantially from US$ 48,797 million in 2018 to a low of US$ 40,815 million in 2020. Following this period, the asset base stabilized, exhibiting marginal annual increases to conclude at US$ 42,242 million in 2023.
- Total Asset Turnover Analysis
- The total asset turnover ratio reflects the correlation between revenue volatility and asset restructuring. The ratio declined from 0.64 in 2018 to a minimum of 0.55 in 2020, indicating a period of decreased efficiency in generating sales from the asset base. From 2021 through 2023, the ratio improved steadily, rising to 0.63. This recovery is primarily attributable to the growth in net sales occurring against a relatively static asset base, signifying an improvement in operational productivity that has nearly returned to 2018 levels.
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Equity Turnover
Johnson Controls International plc, equity turnover calculation, comparison to benchmarks
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net sales | 26,793) | 25,299) | 23,668) | 22,317) | 23,968) | 31,400) | |
| Shareholders’ equity attributable to Johnson Controls | 16,545) | 16,268) | 17,562) | 17,447) | 19,766) | 21,164) | |
| Long-term Activity Ratio | |||||||
| Equity turnover1 | 1.62 | 1.56 | 1.35 | 1.28 | 1.21 | 1.48 | |
| Benchmarks | |||||||
| Equity Turnover, Competitors2 | |||||||
| Boeing Co. | — | — | — | — | — | — | |
| Caterpillar Inc. | 3.28 | 3.57 | 2.92 | — | — | — | |
| Eaton Corp. plc | 1.22 | 1.22 | 1.20 | — | — | — | |
| GE Aerospace | 2.36 | 2.02 | 1.76 | — | — | — | |
| Honeywell International Inc. | 2.31 | 2.12 | 1.85 | — | — | — | |
| Lockheed Martin Corp. | 9.89 | 7.12 | 6.12 | — | — | — | |
| RTX Corp. | 1.15 | 0.92 | 0.88 | — | — | — | |
| Equity Turnover, Sector | |||||||
| Capital Goods | 3.07 | 2.54 | 2.28 | — | — | — | |
| Equity Turnover, Industry | |||||||
| Industrials | 3.33 | 3.06 | 2.63 | — | — | — | |
Based on: 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30).
1 2023 Calculation
Equity turnover = Net sales ÷ Shareholders’ equity attributable to Johnson Controls
= 26,793 ÷ 16,545 = 1.62
2 Click competitor name to see calculations.
The financial performance from 2018 to 2023 is characterized by a volatile sales trajectory and a systematic reduction in shareholders' equity, which collectively influenced the equity turnover ratio.
- Net Sales Dynamics
- A significant contraction in net sales occurred between 2018 and 2020, with values falling from 31,400 million US$ to a period low of 22,317 million US$. Following this decline, a consistent recovery trend is observed from 2021 through 2023, with sales rising steadily to reach 26,793 million US$.
- Shareholders' Equity Trends
- Equity attributable to the company exhibited a general downward trajectory for the majority of the analyzed period. From a high of 21,164 million US$ in 2018, the equity base decreased to 16,268 million US$ by 2022, followed by a marginal recovery to 16,545 million US$ in 2023.
- Equity Turnover Analysis
- The equity turnover ratio experienced an initial drop from 1.48 in 2018 to 1.21 in 2019. However, a sustained upward trend followed, with the ratio increasing annually to reach 1.62 by September 30, 2023. This improvement suggests an increase in the efficiency of equity utilization, as the growth in net sales since 2020 occurred alongside a reduced equity base, resulting in a higher ratio of revenue generation per unit of equity.
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