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.
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- Income Statement
- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Price to Operating Profit (P/OP) since 2005
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Long-term Activity Ratios (Summary)
National Oilwell Varco Inc., long-term (investment) activity ratios
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio started at 6.00 in 2011 and increased to a peak of 6.81 in 2012. Following that, it slightly declined to 6.71 in 2013 and continued a downward trend to 6.38 in 2014. A more pronounced decline was observed in 2015, where the ratio dropped significantly to 4.72. This pattern indicates a reduced efficiency in generating sales revenue from net fixed assets over time, especially noticeable in the final year reported.
- Total Asset Turnover
- The total asset turnover ratio showed an initial increase from 0.57 in 2011 to 0.64 in 2012, and then a slight rise to 0.66 in 2013. However, it decreased marginally to 0.64 in 2014, before falling more sharply to 0.55 in 2015. This suggests that overall asset utilization efficiency improved modestly during the early years but weakened toward the end of the period, indicating less effective use of total assets to generate revenue.
- Equity Turnover
- The equity turnover ratio grew steadily from 0.83 in 2011 to 0.99 in 2012, further increasing to 1.03 in 2013 and 1.04 in 2014. In 2015, there was a decline to 0.90. This trend reflects improved efficiency in using shareholder equity to generate sales during the first four years, followed by a reduction in efficiency in the final year of the period.
- Summary of Observations
- Across all three turnover ratios, the years 2011 through 2014 showed either growth or stability in operational efficiency metrics. Notably, both net fixed asset turnover and equity turnover reached their highest points around 2012 to 2014. Conversely, 2015 marked a downturn in all the analyzed ratios, signaling a broad decline in asset and equity utilization efficiency. This overall downward shift in 2015 suggests emerging challenges in maintaining sales volumes relative to asset and equity bases during that year.
Net Fixed Asset Turnover
National Oilwell Varco Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | ||||||
| Property, plant and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Schlumberger Ltd. | ||||||
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Net fixed asset turnover = Revenue ÷ Property, plant and equipment, net
= ÷ =
2 Click competitor name to see calculations.
- Revenue Trends
- The revenue increased significantly from 14,658 million US dollars in 2011 to a peak of 22,869 million in 2013, indicating strong growth over these years. However, after 2013, the revenue experienced a decline, dropping to 21,440 million in 2014 and further decreasing sharply to 14,757 million in 2015. The pattern suggests a growth phase followed by a contraction period, with 2015 revenues falling close to the 2011 level.
- Property, Plant and Equipment, Net
- Net property, plant, and equipment showed a consistent upward trend from 2011 through 2013, increasing from 2,445 million US dollars to 3,408 million US dollars. In 2014, there was a slight decrease to 3,362 million, which continued in 2015 reaching 3,124 million. The data indicates continued investment in fixed assets until 2013, followed by a modest reduction or possible asset disposals in the latter two years.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio increased from 6.00 in 2011 to 6.81 in 2012, showing improved efficiency in generating revenue from fixed assets. It then showed a gradual decline, reaching 6.71 in 2013 and 6.38 in 2014. In 2015, this ratio fell significantly to 4.72, indicating a marked decrease in asset utilization efficiency. This decline corresponds with both decreasing revenue and the reduction in net fixed assets, suggesting operational or market challenges impacting asset productivity.
- Overall Analysis
- The financial data reveals a phase of growth and increasing operational efficiency during 2011-2013, with rising revenues, investments in fixed assets, and improved asset turnover ratios. Post-2013, the company experienced a downturn characterized by declining revenues and asset base, together with reduced efficiency in utilizing fixed assets to generate revenue. These trends may indicate external market pressures or internal challenges affecting business performance during 2014 and 2015.
Total Asset Turnover
National Oilwell Varco Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Schlumberger Ltd. | ||||||
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Total asset turnover = Revenue ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Revenue
- The revenue showed a significant growth from 14,658 million US dollars in 2011 to a peak of 22,869 million US dollars in 2013. After reaching this peak, revenue exhibited a decline, decreasing to 21,440 million US dollars in 2014 and further dropping sharply to 14,757 million US dollars by the end of 2015.
- Total assets
- Total assets increased steadily from 25,515 million US dollars in 2011 to a high of 34,812 million US dollars in 2013. In 2014, total assets slightly decreased to 33,562 million US dollars and subsequently declined more noticeably to 26,725 million US dollars in 2015, closely mirroring the trend observed in revenue.
- Total asset turnover
- The total asset turnover ratio demonstrated a rising trend from 0.57 in 2011 to reach its maximum value of 0.66 in 2013, indicating improved efficiency in generating revenue from assets during this period. This ratio then declined to 0.64 in 2014 and further decreased to 0.55 in 2015, reflecting reduced asset utilization efficiency coinciding with the reductions in both revenue and total assets.
Equity Turnover
National Oilwell Varco Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | ||||||
| Total Company stockholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Schlumberger Ltd. | ||||||
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Equity turnover = Revenue ÷ Total Company stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Revenue
- The revenue displayed an overall increasing trend from 2011 to 2013, rising from $14,658 million to $22,869 million. However, after reaching its peak in 2013, revenue declined to $21,440 million in 2014 and further decreased significantly to $14,757 million in 2015. This indicates a period of growth followed by a sharp contraction over the last two years.
- Total Company Stockholders’ Equity
- Stockholders’ equity exhibited a growth trend from 2011 through 2013, increasing from $17,619 million to $22,230 million. Similar to revenue, equity experienced a decline after 2013, dropping to $20,692 million in 2014 and further to $16,383 million in 2015. The decline in equity in the last two years suggests a possible impact from decreased profitability or other factors reducing retained earnings or capital reserves.
- Equity Turnover
- Equity turnover showed a gradual increase from 0.83 in 2011 to a peak of 1.04 in 2014, indicating improved efficiency in generating revenue from shareholders' equity during this period. However, in 2015, the ratio fell to 0.9, reflecting a reduced efficiency which aligns with the notable decline in revenue and equity for that year.