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)
Norfolk Southern Corp., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The financial ratios reveal several key trends over the five-year period from 2017 to 2021. Overall, these metrics provide insights into the company's asset utilization and efficiency in generating revenue relative to its assets and equity.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio remained relatively stable, ranging narrowly from 0.31 to 0.37. It increased slightly from 0.35 in 2017 to 0.37 in 2018, held steady at 0.36 in 2019, then declined noticeably to 0.31 in 2020 before recovering to 0.35 by the end of 2021. This pattern indicates some fluctuation in the company's ability to generate revenue from its fixed asset base, with a dip in 2020 potentially reflecting operational challenges during that year and a subsequent rebound.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- When including operating lease right-of-use assets, the ratio closely mirrors the net fixed asset turnover without these adjustments. The similarity in values suggests that the leases accounted for under this category had a minimal impact on overall fixed asset turnover trends, underscoring consistent asset utilization whether or not these leased assets are considered.
- Total Asset Turnover
- The total asset turnover ratio exhibits a downward trend from 0.3 in 2017 to a low of 0.26 in 2020, followed by a slight recovery to 0.29 in 2021. This decline points to a reduction in efficiency in generating revenue from all company assets over time, with the lowest point again occurring in 2020, indicating that the company faced challenges in asset productivity, potentially correlated with broader market or operational conditions affecting that year.
- Equity Turnover
- Equity turnover demonstrates a generally positive trend, increasing from 0.64 in 2017 to 0.82 in 2021, despite a dip in 2020 to 0.66. This suggests an improvement in the company’s effectiveness at generating revenue per unit of equity over the analyzed period. The recovery after 2020 indicates strengthened utilization of equity, which may reflect changes in financing structure, profit margins, or operational performance.
In summary, the ratios reveal a consistent pattern of stable but slightly fluctuating asset utilization, with 2020 representing a year of relative weakness across most measures, likely influenced by external conditions. Recovery is evident in 2021, particularly in equity turnover, suggesting operational adjustments or improvements resulting in better equity efficiency. The stable ratio figures inclusive of operating leases imply limited impact of leasing structure on asset turnover calculations.
Net Fixed Asset Turnover
Norfolk Southern Corp., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Railway operating revenues | 11,142) | 9,789) | 11,296) | 11,458) | 10,551) | |
| Properties less accumulated depreciation | 31,653) | 31,345) | 31,614) | 31,091) | 30,330) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 0.35 | 0.31 | 0.36 | 0.37 | 0.35 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| FedEx Corp. | 2.35 | 2.06 | 2.29 | — | — | |
| Uber Technologies Inc. | 9.42 | 6.14 | — | — | — | |
| Union Pacific Corp. | 0.40 | 0.36 | — | — | — | |
| United Airlines Holdings Inc. | 0.77 | 0.49 | — | — | — | |
| United Parcel Service Inc. | 2.91 | 2.62 | — | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Transportation | 1.55 | 1.30 | — | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Industrials | 2.72 | 2.17 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Net fixed asset turnover = Railway operating revenues ÷ Properties less accumulated depreciation
= 11,142 ÷ 31,653 = 0.35
2 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals several noteworthy trends and patterns.
- Railway Operating Revenues
- The revenue figures showed growth from 2017 to 2018, rising from 10,551 million USD to 11,458 million USD. However, there was a slight decrease in 2019 to 11,296 million USD, followed by a more pronounced decline in 2020 to 9,789 million USD. This decline in 2020 could be indicative of external factors impacting demand or operational constraints. By 2021, revenues increased again to 11,142 million USD, nearing the levels observed in 2018 and 2019, suggesting a recovery or improvement in operating conditions.
- Properties Less Accumulated Depreciation
- The net property values exhibited a consistent upward trend over the period. Starting from 30,330 million USD in 2017, the value steadily increased each year, reaching 31,653 million USD by 2021. This steady increase indicates ongoing investment or asset retention strategies that maintain or enhance asset base despite accumulated depreciation. The growth in net property values was modest but consistent, reflecting stability in asset management.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio, which measures the efficiency of fixed asset utilization to generate revenues, showed a moderate fluctuation throughout the period. It increased from 0.35 in 2017 to a peak of 0.37 in 2018, then slightly declined to 0.36 in 2019. A more significant drop to 0.31 was observed in 2020, aligning with the revenue decline during the same year. In 2021, the ratio recovered to 0.35, matching the 2017 level. This pattern suggests the company experienced lower efficiency in asset utilization in 2020, likely driven by the operational challenges that impacted revenues, but efficiency improved back to previous levels by 2021.
Overall, the data indicate that while the company encountered a dip in revenues and asset utilization efficiency in 2020, it maintained a stable asset base and demonstrated recovery in operating revenues and efficiency by 2021. This suggests resilience in business operations and asset management over the observed timeframe.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Norfolk Southern Corp., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Railway operating revenues | 11,142) | 9,789) | 11,296) | 11,458) | 10,551) | |
| Properties less accumulated depreciation | 31,653) | 31,345) | 31,614) | 31,091) | 30,330) | |
| Operating lease ROU assets (classified in Other assets) | 411) | 433) | 539) | —) | —) | |
| Properties less accumulated depreciation (including operating lease, right-of-use asset) | 32,064) | 31,778) | 32,153) | 31,091) | 30,330) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 0.35 | 0.31 | 0.35 | 0.37 | 0.35 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| FedEx Corp. | 1.64 | 1.46 | 2.29 | — | — | |
| Uber Technologies Inc. | 5.39 | 3.61 | — | — | — | |
| Union Pacific Corp. | 0.38 | 0.35 | — | — | — | |
| United Airlines Holdings Inc. | 0.67 | 0.43 | — | — | — | |
| United Parcel Service Inc. | 2.63 | 2.40 | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Transportation | 1.33 | 1.12 | — | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Industrials | 2.34 | 1.92 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Railway operating revenues ÷ Properties less accumulated depreciation (including operating lease, right-of-use asset)
= 11,142 ÷ 32,064 = 0.35
2 Click competitor name to see calculations.
- Railway Operating Revenues
- The railway operating revenues show a fluctuating trend over the five-year period. Revenues increased from 10,551 million USD in 2017 to a peak of 11,458 million USD in 2018. There was a slight decline in 2019 to 11,296 million USD, followed by a more pronounced decrease in 2020, where revenues dropped to 9,789 million USD. This decline in 2020 may be attributable to external factors impacting the transportation sector during that year. In 2021, revenues partially recovered, rising to 11,142 million USD, though this figure remained marginally below the 2018 peak.
- Properties Less Accumulated Depreciation (Including Operating Lease, Right-of-Use Asset)
- The net property, plant, and equipment value, accounting for accumulated depreciation and right-of-use assets, displayed a modest upward trend across the examined years. Beginning at 30,330 million USD in 2017, the asset base grew consistently, reaching 32,064 million USD by 2021. This gradual increase suggests ongoing capital investment and asset acquisition or improvements over the period, despite minor fluctuations such as a slight decrease in 2020.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- The net fixed asset turnover ratio experienced variability during the timeframe under review. Initially, the ratio increased from 0.35 in 2017 to 0.37 in 2018, indicating mildly improved efficiency in generating revenue from fixed assets. However, in 2019, the ratio declined back to 0.35 and further reduced to 0.31 in 2020, coinciding with the drop in revenues and reflecting lower asset utilization during that year. In 2021, the turnover ratio rebounded to 0.35, suggesting a recovery in operational efficiency aligned with the regained revenue levels.
Total Asset Turnover
Norfolk Southern Corp., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Railway operating revenues | 11,142) | 9,789) | 11,296) | 11,458) | 10,551) | |
| Total assets | 38,493) | 37,962) | 37,923) | 36,239) | 35,711) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.29 | 0.26 | 0.30 | 0.32 | 0.30 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| FedEx Corp. | 1.01 | 0.94 | 1.28 | — | — | |
| Uber Technologies Inc. | 0.45 | 0.33 | — | — | — | |
| Union Pacific Corp. | 0.34 | 0.31 | — | — | — | |
| United Airlines Holdings Inc. | 0.36 | 0.26 | — | — | — | |
| United Parcel Service Inc. | 1.40 | 1.36 | — | — | — | |
| Total Asset Turnover, Sector | ||||||
| Transportation | 0.76 | 0.69 | — | — | — | |
| Total Asset Turnover, Industry | ||||||
| Industrials | 0.58 | 0.50 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Total asset turnover = Railway operating revenues ÷ Total assets
= 11,142 ÷ 38,493 = 0.29
2 Click competitor name to see calculations.
The financial data over the five-year period exhibit several key trends regarding operational performance and asset management.
- Railway Operating Revenues
- The revenues experienced a general upward trend from 2017 to 2019, increasing from 10,551 million USD in 2017 to 11,296 million USD in 2019. There was a noticeable decline in 2020, dropping to 9,789 million USD, likely reflecting external economic challenges during that year. By 2021, revenues showed recovery, rising again to 11,142 million USD, almost reaching pre-2020 levels. This pattern suggests resilience and recovery capabilities in revenue generation despite the dip observed in 2020.
- Total Assets
- Total assets steadily increased over the period, from 35,711 million USD in 2017 to 38,493 million USD in 2021. The incremental growth was consistent, with minor fluctuations, indicating ongoing asset accumulation or investment. The steady increase in asset base implies sustained capital deployment to support operations or strategic initiatives.
- Total Asset Turnover
- The asset turnover ratio started at 0.30 in 2017, peaked slightly at 0.32 in 2018, and then declined to 0.3 in 2019. A more significant decrease was seen in 2020, falling to 0.26, which is consistent with the revenue decline in that year. In 2021, the ratio increased moderately to 0.29, suggesting improved efficiency in utilizing assets to generate revenues after the downturn. However, the ratio did not fully recover to previous peak levels, indicating some lingering impact on asset efficiency.
Overall, the data reveals that while total assets increased continuously, the efficiency of using these assets to generate revenue was variable and influenced by external conditions, particularly in 2020. Revenue displayed resilience with a quick rebound after the decline, reflecting responsive operational adjustments or market recovery. The trends point to strategic challenges in maintaining asset turnover efficiency amid fluctuating revenue environments.
Equity Turnover
Norfolk Southern Corp., equity turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Railway operating revenues | 11,142) | 9,789) | 11,296) | 11,458) | 10,551) | |
| Stockholders’ equity | 13,641) | 14,791) | 15,184) | 15,362) | 16,359) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 0.82 | 0.66 | 0.74 | 0.75 | 0.64 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| FedEx Corp. | 3.47 | 3.78 | 3.92 | — | — | |
| Uber Technologies Inc. | 1.21 | 0.91 | — | — | — | |
| Union Pacific Corp. | 1.54 | 1.15 | — | — | — | |
| United Airlines Holdings Inc. | 4.90 | 2.58 | — | — | — | |
| United Parcel Service Inc. | 6.83 | 128.81 | — | — | — | |
| Equity Turnover, Sector | ||||||
| Transportation | 3.40 | 3.69 | — | — | — | |
| Equity Turnover, Industry | ||||||
| Industrials | 2.63 | 2.75 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Equity turnover = Railway operating revenues ÷ Stockholders’ equity
= 11,142 ÷ 13,641 = 0.82
2 Click competitor name to see calculations.
The financial data indicates several notable trends over the five-year period ending in 2021. Railway operating revenues demonstrate fluctuations, increasing from 10,551 million USD in 2017 to a peak of 11,458 million USD in 2018, followed by a slight decrease in 2019 to 11,296 million USD. A more pronounced decline occurred in 2020, with revenues falling to 9,789 million USD, likely reflecting external economic pressures during that year. However, a recovery trend is observed in 2021 with revenues rising back to 11,142 million USD, nearing pre-2020 levels.
Stockholders' equity shows a consistent downward trend throughout the entire period. Starting at 16,359 million USD in 2017, equity decreases incrementally each year, reaching 13,641 million USD by the end of 2021. This decline suggests that the company either returned value to shareholders, experienced losses, or distributed dividends without corresponding equity injections or retained earnings growth.
The equity turnover ratio, which measures the efficiency of equity in generating revenues, generally trends upward despite some fluctuations. It starts at 0.64 in 2017, increases significantly to 0.75 in 2018, and remains relatively stable at 0.74 in 2019. A dip occurs in 2020, falling to 0.66, consistent with the revenue decline in that year. In 2021, however, the ratio rises sharply to 0.82, indicating improved utilization of equity in generating operating revenues compared to prior years.
- Railway Operating Revenues
- Initial growth followed by a 2020 decline with partial recovery in 2021.
- Stockholders’ Equity
- Continuous decline over the five-year period, indicating reduced equity base.
- Equity Turnover
- Overall improvement in efficiency to generate revenue from equity, despite a setback in 2020.