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)
Linde plc, long-term (investment) activity ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The financial data reveals several notable trends in the efficiency ratios over the observed five-year period.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibits a consistent upward trend from 0.94 in 2020 to a peak of 1.41 in 2022, followed by a slight decline to 1.32 in 2024. This pattern indicates improving efficiency in utilizing fixed assets for revenue generation until 2022, with a minor reduction in turnover efficiency thereafter.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- This variant of the fixed asset turnover ratio shows a similar trend to the standard measure, increasing from 0.91 in 2020 to 1.37 in 2022, then decreasing slightly to 1.28 in 2024. The inclusion of right-of-use assets under operating leases reduces the turnover ratios marginally compared to the standard measure, suggesting the impact of leased assets on asset utilization efficiency.
- Total Asset Turnover
- Total asset turnover improves from 0.31 in 2020 to 0.42 in 2022, indicating better overall asset utilization to generate revenue. However, it stabilizes at around 0.41 in 2023 and 2024, showing limited further improvement and a plateau in how effectively total assets contribute to sales.
- Equity Turnover
- The equity turnover ratio demonstrates a steady and continuous increase from 0.58 in 2020 to 0.87 in 2024. This trend reflects progressively enhanced efficiency in using shareholders' equity to generate revenue over the years, with no signs of decline or stabilization within this period.
Overall, the data indicates a general improvement in asset and equity utilization efficiency through 2022, with some stabilization or slight decreases in fixed asset efficiency ratios subsequently. The equity turnover ratio stands out as the most consistently rising indicator, suggesting strong gains in leveraging equity for revenue generation.
Net Fixed Asset Turnover
Linde plc, net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales | 33,005) | 32,854) | 33,364) | 30,793) | 27,243) | |
| Property, plant and equipment, net, including finance lease right-of-use assets | 24,964) | 24,731) | 23,694) | 26,166) | 28,866) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 1.32 | 1.33 | 1.41 | 1.18 | 0.94 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Sherwin-Williams Co. | 6.21 | 8.13 | 10.04 | 10.68 | 10.01 | |
| Net Fixed Asset Turnover, Sector | ||||||
| Chemicals | 1.96 | 2.03 | 2.14 | 1.81 | 1.49 | |
| Net Fixed Asset Turnover, Industry | ||||||
| Materials | 1.23 | 1.26 | 1.35 | 1.27 | 0.99 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net fixed asset turnover = Sales ÷ Property, plant and equipment, net, including finance lease right-of-use assets
= 33,005 ÷ 24,964 = 1.32
2 Click competitor name to see calculations.
- Sales
- Sales exhibited a rising trend from 2020 through 2022, increasing from 27,243 million USD to 33,364 million USD. However, in 2023, sales experienced a slight decline to 32,854 million USD, followed by a marginal increase to 33,005 million USD in 2024. Overall, sales growth has moderated after peaking in 2022.
- Property, Plant, and Equipment (PPE) Net
- The net value of property, plant, and equipment, including finance lease right-of-use assets, showed a steady decline from 28,866 million USD in 2020 to 23,694 million USD in 2022. This downward trend reversed slightly in 2023 and 2024, with values rising to 24,731 million USD and 24,964 million USD respectively. This pattern suggests a reduction in fixed asset base initially followed by a modest recovery.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio has generally increased over the observed period, starting at 0.94 in 2020 and peaking at 1.41 in 2022. This indicates improved efficiency in generating sales from fixed assets during those years. However, the ratio slightly decreased to 1.33 in 2023 and further to 1.32 in 2024, signaling a marginal reduction in asset utilization efficiency after its peak.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Linde plc, net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales | 33,005) | 32,854) | 33,364) | 30,793) | 27,243) | |
| Property, plant and equipment, net, including finance lease right-of-use assets | 24,964) | 24,731) | 23,694) | 26,166) | 28,866) | |
| Operating lease right-of-use assets | 800) | 759) | 726) | 853) | 935) | |
| Property, plant and equipment, net, including finance lease right-of-use assets (including operating lease, right-of-use asset) | 25,764) | 25,490) | 24,420) | 27,019) | 29,801) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 1.28 | 1.29 | 1.37 | 1.14 | 0.91 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Sherwin-Williams Co. | 4.07 | 4.88 | 5.44 | 5.41 | 5.11 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Chemicals | 1.78 | 1.85 | 1.95 | 1.65 | 1.37 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Materials | 1.17 | 1.20 | 1.28 | 1.21 | 0.95 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Sales ÷ Property, plant and equipment, net, including finance lease right-of-use assets (including operating lease, right-of-use asset)
= 33,005 ÷ 25,764 = 1.28
2 Click competitor name to see calculations.
- Sales Trend
- There is a consistent growth in sales over the five-year period from 2020 to 2024. Sales increased from 27,243 million USD in 2020 to 33,005 million USD in 2024. The growth was most notable between 2020 and 2022, after which sales stabilized with marginal increases and a slight dip in 2023.
- Property, Plant, and Equipment (PP&E) Trends
- The net value of property, plant, and equipment, which includes finance lease right-of-use assets, shows a declining trend from 29,801 million USD in 2020 to 24,420 million USD in 2022. However, there was a moderate recovery in the following years, reaching 25,764 million USD by 2024. This suggests some reinvestment or recovery in asset values after an initial reduction.
- Net Fixed Asset Turnover Ratio Trend
- The net fixed asset turnover ratio improved significantly from 0.91 in 2020 to a peak of 1.37 in 2022, indicating enhanced efficiency in utilizing fixed assets to generate sales. In 2023 and 2024, the ratio slightly decreased to 1.29 and 1.28 respectively but remained above earlier levels, reflecting sustained higher asset productivity compared to 2020 and 2021.
- Overall Insights
- The data reflects a period of sales growth coupled with reductions in fixed asset values initially, followed by a modest asset value rebound. Increased fixed asset turnover ratio over the period suggests improved operational efficiency in generating sales from fixed assets. The slight decline in turnover ratio in the later years indicates stabilization rather than a deterioration in asset utilization efficiency.
Total Asset Turnover
Linde plc, total asset turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales | 33,005) | 32,854) | 33,364) | 30,793) | 27,243) | |
| Total assets | 80,147) | 80,811) | 79,658) | 81,605) | 88,229) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.41 | 0.41 | 0.42 | 0.38 | 0.31 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Sherwin-Williams Co. | 0.98 | 1.00 | 0.98 | 0.97 | 0.90 | |
| Total Asset Turnover, Sector | ||||||
| Chemicals | 0.54 | 0.54 | 0.54 | 0.50 | 0.42 | |
| Total Asset Turnover, Industry | ||||||
| Materials | 0.51 | 0.50 | 0.51 | 0.49 | 0.40 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Total asset turnover = Sales ÷ Total assets
= 33,005 ÷ 80,147 = 0.41
2 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals several key trends in the company's performance and asset management.
- Sales Performance
- Sales figures demonstrate a consistent growth trend from 2020 through 2022, increasing from 27,243 million US dollars to 33,364 million US dollars. However, there is a slight decline in sales in 2023 to 32,854 million US dollars, followed by a modest recovery in 2024 to 33,005 million US dollars. Overall, sales have shown positive growth over the five-year span but exhibited some volatility in the last two years.
- Total Assets
- Total assets peaked at 88,229 million US dollars in 2020 and then declined steadily over the subsequent years, reaching 80,147 million US dollars by the end of 2024. This downward trend indicates a contraction or divestiture of assets or changes in asset valuation and suggests a potential focus on asset optimization or restructuring.
- Total Asset Turnover
- The total asset turnover ratio, which measures the efficiency of asset use in generating sales, improved consistently from 0.31 in 2020 to 0.42 in 2022. This indicates enhanced efficiency in utilizing assets to generate revenue. Although there is a slight decline to 0.41 in 2023 and it remains stable into 2024, the ratio maintains a higher level compared to the start of the period, suggesting sustained improvement in asset utilization despite the decrease in total assets.
In summary, the company showed increasing sales alongside diminishing total assets, with the asset turnover ratio improving notably, which reflects increased operational efficiency. The slight sales dip in 2023, coupled with stable asset turnover, may point to external market conditions or internal operational adjustments. The overall financial trends indicate a focus on maximizing asset productivity while managing asset base reduction.
Equity Turnover
Linde plc, equity turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales | 33,005) | 32,854) | 33,364) | 30,793) | 27,243) | |
| Total Linde plc shareholders’ equity | 38,092) | 39,720) | 40,028) | 44,035) | 47,317) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 0.87 | 0.83 | 0.83 | 0.70 | 0.58 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Sherwin-Williams Co. | 5.70 | 6.20 | 7.14 | 8.18 | 5.09 | |
| Equity Turnover, Sector | ||||||
| Chemicals | 1.33 | 1.29 | 1.29 | 1.09 | 0.90 | |
| Equity Turnover, Industry | ||||||
| Materials | 1.37 | 1.31 | 1.33 | 1.22 | 0.98 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Equity turnover = Sales ÷ Total Linde plc shareholders’ equity
= 33,005 ÷ 38,092 = 0.87
2 Click competitor name to see calculations.
The financial data indicates a consistent increase in sales over the observed five-year period. Sales rose from US$27,243 million in 2020 to US$33,005 million in 2024, showing a steady upward trend with a slight deceleration between 2022 and 2023, followed by a small increase again in 2024.
Contrarily, total shareholders’ equity has demonstrated a declining pattern during the same timeframe. Beginning at US$47,317 million in 2020, equity decreased each year, reaching US$38,092 million in 2024. The decline appears relatively gradual but persistent, suggesting ongoing reductions in equity or accumulated losses.
Regarding efficiency metrics, the equity turnover ratio has significantly increased annually, rising from 0.58 in 2020 to 0.87 in 2024. This upward trend suggests that the company is generating higher sales volume relative to its equity base over time, indicating improved utilization of equity to drive revenue.
- Sales Trend
- Consistent growth with slight fluctuations; total increase of approximately 21% from 2020 to 2024.
- Shareholders’ Equity
- Steady decline over five years; approximately 20% reduction, suggesting equity base contraction.
- Equity Turnover Ratio
- Marked improvement indicating enhanced efficiency in generating sales from equity, increasing by 50% over the period.
Overall, the data reflects a company growing its sales revenue while facing diminishing equity, which combined with increasing equity turnover, may point towards financial leverage or capital structure changes requiring further examination.