McKesson Corp. (NYSE:MCK)

The analysis of the quarterly financial ratios reveals distinctive trends in asset utilization and equity turnover over the observed periods.

Net Fixed Asset Turnover

This ratio, available from March 31, 2011, shows a relatively stable performance initially, fluctuating around the 100–120 range through early 2013. A noticeable decline begins roughly in mid-2013, decreasing from over 90 to a low near 61.93 in March 2014, suggesting diminished efficiency in using fixed assets to generate sales during this period. Post this trough, there is a gradual recovery and upward trend, reaching approximately 89.55 by December 2015, before experiencing a mild decline toward mid-2016, indicating some restoration of fixed asset productivity but still below earlier peaks.

Total Asset Turnover

This ratio, also present from March 31, 2011, demonstrates an initial peak near 3.7 to 3.9 in 2011–2012, indicating effective utilization of total assets to yield revenue. Subsequently, a decline is observed from late 2012 through early 2014, bottoming out around 2.66 in March 2014. Following this period, total asset turnover exhibits a consistent improvement trend through 2015 and 2016, stabilizing slightly above 3.3. This recovery suggests enhanced efficiency in asset use after the temporary downturn.

Equity Turnover

The equity turnover ratio remains relatively high and stable throughout the timeframe, with values generally fluctuating between 15 and 22. Notably, from 2014 onward, the ratio trends upwards more markedly, reaching a peak around 22.38 in June 2015, indicating quicker turnover of equity in generating sales. Post-2015, a modest decrease occurs but the ratio maintains elevated levels near 20, reflecting sustained efficient use of shareholders’ equity to drive revenue.

In summary, the data exhibits a pattern of initial stability followed by declines around 2013–2014 in net fixed asset and total asset turnover ratios, suggesting a period of reduced operational efficiency. Conversely, equity turnover maintains strong performance, with a pronounced upward movement during the same interval. Post-2014 trends indicate recovery and improvement in asset utilization metrics, implying effective management responses or operational adjustments enhancing asset productivity and financial performance in subsequent periods.

The financial data reveals several notable trends in revenues, property, plant and equipment (PP&E), and net fixed asset turnover over the periods analyzed.

Revenues

Revenues display a generally upward trajectory from June 2010 through September 2016, increasing from approximately 27,450 million US dollars to nearly 50,000 million US dollars. There are some minor fluctuations observed, such as a dip around mid-2012 and early 2016, but the overall pattern indicates steady growth. A particularly strong increase is noted from early 2014 to mid-2015, where revenues jump from roughly 38,000 million to over 47,000 million US dollars, suggesting a period of accelerated business expansion or successful operational initiatives during these years.

Property, Plant and Equipment (PP&E), net

The net value of PP&E remains relatively stable in the early years, fluctuating in the range of 860 to about 1,360 million US dollars until early 2014. Beginning in 2014, there is a marked increase in net PP&E, peaking at around 2,430 million US dollars in June 2016. This rise aligns with the increase in revenue, potentially indicating significant investment in fixed assets, possibly reflecting expansion efforts or capital expenditure projects aimed at supporting growing operations.

Net Fixed Asset Turnover

This ratio, which measures the efficiency of using net fixed assets to generate revenues, initially remains above 100 from late 2010 through early 2012, indicating strong asset utilization. Following that period, a gradual decline begins, dropping to levels around the low 90s by early 2013 and further decreasing sharply after 2013 to a low near 61.93 by March 2014. After this low point, the ratio shows a consistent improvement, rising to approximately 89.55 by the end of 2015. Subsequently, it dips slightly in 2016, finishing near 79.45-84.46 range. The initial decline may reflect rapidly increased asset investment outpacing revenue growth, while the later improvement signals better alignment of asset use with revenue generation, possibly through enhanced operational efficiency or asset optimization.

The financial data displays key trends in revenues, total assets, and total asset turnover for the periods from mid-2010 to late 2016. An analysis of these trends provides insights into operational efficiency and asset management.

Revenues

The revenues show a general upward trend over the approximately six-year period. Starting at around $27.45 billion in June 2010, revenues increased steadily, with occasional fluctuations. Notably, there was significant growth from 2013 through 2014, culminating in a revenue peak of $46.48 billion in December 2014. Subsequent periods show revenue stability with minor volatility, maintaining a level around $47 to $49 billion by the third quarter of 2016. This steady growth suggests expanding sales or service volume over time.

Total Assets

Total assets also exhibit an upward trajectory with more pronounced growth beginning in early 2014. From approximately $27.4 billion in mid-2010, total assets climbed steadily with minor fluctuations until early 2014, when a sharp increase occurred, peaking at about $55.9 billion in September 2016. This substantial asset growth over the latter periods may indicate significant investments, acquisitions, or capital expenditures during these years, reflecting expansion or strategic business developments.

Total Asset Turnover

The total asset turnover ratio, which measures revenue generated per unit of assets, shows some volatility but generally indicates moderate efficiency. Starting from around 3.63 in March 2011, it fluctuated between approximately 3.49 and 3.89 until early 2014. A marked decline to around 2.66 is observed in March 2014, coinciding with the sharp increase in total assets at that time. After this drop, the ratio gradually improved, rising back above 3.3 by the second half of 2015 and maintaining that level through 2016. This pattern suggests that the rapid asset growth outpaced revenue increases initially, reducing asset efficiency temporarily, followed by some recovery as revenues adapted to the asset base expansion.

The financial data reveals several key trends over the periods analyzed. Revenues show a general upward trajectory, starting at 27,450 million US dollars in June 2010 and reaching around 49,957 million US dollars by September 2016. This indicates a significant growth in sales over the six-year period, with occasional fluctuations that suggest some quarterly variability. Notably, revenues jumped sharply from 34,306 million US dollars in December 2013 to 43,476 million US dollars in June 2014, highlighting a period of accelerated growth.

Shareholders' equity exhibits more moderate changes, beginning at 6,879 million US dollars in June 2010 and generally increasing to 9,449 million US dollars by September 2016. While equity experienced some declines and recoveries—such as a dip from 8,984 million US dollars in June 2014 to 8,001 million US dollars in March 2015—the overall trend is positive, reflecting strengthening financial stability and capital base over time.

Equity turnover ratio data, available from March 2011 onward, displays a relatively stable pattern with values consistently ranging between approximately 15.5 and 22.4. The ratio peaks at 22.38 in June 2015, suggesting that during this time the company was generating higher revenues per unit of equity compared to other quarters. This higher turnover could imply improved efficiency in using equity to support revenue generation. The values slightly decline after this peak but remain elevated relative to earlier periods.

Revenue Trends

Demonstrates sustained growth with an almost doubling in sales from mid-2010 to late 2016, pointing to expanding business operations and market share.

Intermittent quarterly fluctuations indicate seasonality or varying market conditions across periods.

Significant revenue increase between late 2013 and mid-2014 suggests strategic initiatives or acquisitions impacting top-line growth.

Shareholders’ Equity Trends

Shows a gradual increase over the entire period, indicating accumulation of retained earnings or capital injections.

Some volatility in equity levels, with decreases reflecting possible dividend payments, share repurchases, or losses offsetting gains.

Overall stronger equity base aligns with the firm’s growing scale and financial resilience.

Equity Turnover Ratio Trends

Relatively steady efficiency in generating revenues from equity throughout the dataset.

Peak values in mid-2015 demonstrate temporarily enhanced capital use efficiency.

Post-peak ratio values indicate a return to stable operational efficiency but at a higher baseline than earlier years.