Analysis of Long-term (Investment) Activity Ratios
Quarterly Data
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)
Northrop Grumman Corp., long-term (investment) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
The analysis of the quarterly financial ratios over the observed periods reveals several notable trends in operational efficiency and asset utilization.
- Net Fixed Asset Turnover
- The ratio demonstrates a generally stable pattern starting from the value of 4.72 in March 2018, rising slightly to peak around 5.26 in June 2021. Post-peak, the ratio gradually declines to a low of approximately 4.16 by March 2023. This trend suggests an initial improvement in the company's efficiency in generating sales from its fixed assets, followed by a moderate decrease in asset turnover efficiency in recent quarters.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- When considering the right-of-use assets from operating leases, the turnover ratio starts at the same level as the standard net fixed asset turnover but shows a peak value of around 4.32 in June 2021. Subsequently, it experiences a sharper decline compared to the standard measure, dropping to about 3.45 by December 2022 before a slight increase to 3.49 in March 2023. This could reflect changes in lease accounting or asset utilization tied to leased assets.
- Total Asset Turnover
- The total asset turnover ratio remains relatively stable, fluctuating between 0.79 and 0.9 throughout the analyzed period. Notably, there is an upward movement towards 0.9 around March 2021, indicating a brief enhancement in generating revenues from total assets. However, by March 2023, the ratio settles back to approximately 0.84, indicating consistent yet modest efficiency in overall asset usage.
- Equity Turnover
- The equity turnover ratio exhibits a downward trend over the whole period. Starting from about 3.68 in March 2018, the ratio decreases overall to around 2.45 by March 2023. There is a slight peak near 3.84 in March 2020, followed by a consistent decline. This decline may signal a reduction in revenue generated per unit of shareholder equity, potentially reflecting changes in financial structure or profitability.
In summary, the company shows an initial improvement in asset utilization efficiency, particularly with fixed assets, followed by a gradual decrease in recent quarters. Total assets maintain relatively steady turnover rates, whereas equity turnover declines more noticeably, suggesting potential shifts in financial leverage or earnings relative to equity invested over time.
Net Fixed Asset Turnover
Northrop Grumman Corp., net fixed asset turnover calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Sales | 9,301) | 10,033) | 8,971) | 8,801) | 8,797) | 8,639) | 8,720) | 9,151) | 9,157) | 10,212) | 9,083) | 8,884) | 8,620) | 8,721) | 8,475) | 8,456) | 8,189) | 8,156) | 8,085) | 7,119) | 6,735) | |||||||
| Property, plant and equipment, net of accumulated depreciation | 8,838) | 8,800) | 8,325) | 8,125) | 8,017) | 7,894) | 7,277) | 7,164) | 7,093) | 7,071) | 7,187) | 7,063) | 6,956) | 6,912) | 6,611) | 6,522) | 6,420) | 6,372) | 6,025) | 5,864) | 4,285) | |||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||||
| Net fixed asset turnover1 | 4.20 | 4.16 | 4.23 | 4.30 | 4.40 | 4.52 | 5.12 | 5.25 | 5.26 | 5.20 | 4.91 | 4.91 | 4.93 | 4.90 | 5.03 | 5.04 | 4.91 | 4.72 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Boeing Co. | 6.72 | 6.31 | 5.85 | 5.72 | 5.68 | 5.70 | 5.65 | 5.44 | 4.85 | 4.92 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 4.91 | 4.70 | 4.62 | 4.36 | 4.18 | 3.99 | 3.84 | 3.59 | 3.32 | 3.15 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 6.67 | 6.59 | 6.80 | 6.50 | 6.38 | 6.41 | 6.45 | 6.25 | 6.08 | 6.02 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 5.84 | 5.08 | 5.04 | 4.83 | 4.73 | 4.55 | 4.53 | 4.45 | 4.33 | 1.63 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 6.57 | 6.48 | 6.54 | 6.45 | 6.27 | 6.18 | 6.28 | 6.15 | 5.88 | 5.86 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 8.33 | 8.27 | 8.48 | 8.48 | 8.70 | 8.83 | 9.05 | 9.17 | 9.15 | 9.07 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 4.53 | 4.42 | 4.50 | 4.43 | 4.37 | 4.30 | 4.39 | 4.25 | 4.10 | 3.78 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Net fixed asset turnover
= (SalesQ1 2023
+ SalesQ4 2022
+ SalesQ3 2022
+ SalesQ2 2022)
÷ Property, plant and equipment, net of accumulated depreciation
= (9,301 + 10,033 + 8,971 + 8,801)
÷ 8,838 = 4.20
2 Click competitor name to see calculations.
- Sales
- Sales figures exhibit a general upward trend from March 31, 2018 to March 31, 2023, increasing from $6,735 million to $9,301 million. There are noticeable fluctuations within this period, with sales peaking at $10,212 million in December 2020, followed by a decline and stabilization around $9,000 million to $9,300 million in subsequent quarters. The data indicates consistent growth over the five-year period with some seasonal or cyclical variations.
- Property, Plant, and Equipment, Net of Accumulated Depreciation
- This asset category shows a steady and continuous increase throughout the period, rising from $4,285 million in March 2018 to $8,838 million in March 2023. The growth is fairly consistent quarter over quarter, indicating ongoing investment in fixed assets. There is no evident decline or plateau, which suggests an expansion or modernization of the asset base over time.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio shows moderate volatility. Starting at approximately 4.72 in December 2018, it rises to a peak near 5.26 in mid to late 2021, demonstrating improved efficiency in utilizing fixed assets to generate sales during that period. However, from 2022 onwards, the ratio declines steadily to around 4.20 by March 2023. This weakening trend may indicate that sales growth is not keeping pace with the increase in fixed assets, possibly reflecting diminishing returns on asset investments or changes in operational efficiency.
- Summary of Trends and Insights
- Overall, the data reflects a company with growing sales and a steadily expanding asset base. The significant increase in property, plant, and equipment suggests a strategic focus on capacity or capability enhancement. Despite this, the declining fixed asset turnover ratio in the most recent periods could warrant further analysis to assess asset utilization effectiveness. The sales volatility around 2020 aligns with a peak and subsequent correction, which may be tied to external market conditions or internal adjustments. Attention should be given to aligning asset growth with corresponding sales increases to maintain or improve turnover efficiency going forward.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Northrop Grumman Corp., net fixed asset turnover (including operating lease, right-of-use asset) calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Sales | 9,301) | 10,033) | 8,971) | 8,801) | 8,797) | 8,639) | 8,720) | 9,151) | 9,157) | 10,212) | 9,083) | 8,884) | 8,620) | 8,721) | 8,475) | 8,456) | 8,189) | 8,156) | 8,085) | 7,119) | 6,735) | |||||||
| Property, plant and equipment, net of accumulated depreciation | 8,838) | 8,800) | 8,325) | 8,125) | 8,017) | 7,894) | 7,277) | 7,164) | 7,093) | 7,071) | 7,187) | 7,063) | 6,956) | 6,912) | 6,611) | 6,522) | 6,420) | 6,372) | 6,025) | 5,864) | 4,285) | |||||||
| Operating lease right-of-use assets | 1,779) | 1,811) | 1,680) | 1,669) | 1,702) | 1,655) | 1,552) | 1,575) | 1,552) | 1,533) | 1,479) | 1,528) | 1,469) | 1,511) | 1,511) | 1,278) | 1,283) | —) | —) | —) | —) | |||||||
| Property, plant and equipment, net of accumulated depreciation (including operating lease, right-of-use asset) | 10,617) | 10,611) | 10,005) | 9,794) | 9,719) | 9,549) | 8,829) | 8,739) | 8,645) | 8,604) | 8,666) | 8,591) | 8,425) | 8,423) | 8,122) | 7,800) | 7,703) | 6,372) | 6,025) | 5,864) | 4,285) | |||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 3.49 | 3.45 | 3.52 | 3.57 | 3.63 | 3.74 | 4.22 | 4.30 | 4.32 | 4.28 | 4.07 | 4.04 | 4.07 | 4.02 | 4.10 | 4.22 | 4.10 | 4.72 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||||||||||||||||||||||||
| Eaton Corp. plc | 5.65 | 5.58 | 5.73 | 5.59 | 5.58 | 5.60 | 5.62 | 5.42 | 5.30 | 5.26 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 4.04 | 3.95 | 4.01 | 3.93 | 3.87 | 3.80 | 3.89 | 3.76 | 3.63 | 3.36 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset)
= (SalesQ1 2023
+ SalesQ4 2022
+ SalesQ3 2022
+ SalesQ2 2022)
÷ Property, plant and equipment, net of accumulated depreciation (including operating lease, right-of-use asset)
= (9,301 + 10,033 + 8,971 + 8,801)
÷ 10,617 = 3.49
2 Click competitor name to see calculations.
- Sales Trends
- Sales demonstrate an overall upward trajectory over the observed period, starting at 6,735 million US dollars in the first quarter of 2018 and reaching a peak of 10,212 million US dollars at the end of 2020. Following this peak, sales experienced some fluctuations, notably decreasing to 8,639 million US dollars in the last quarter of 2021, before slightly recovering to 9,301 million US dollars by the first quarter of 2023. These variations may indicate periods of volatility or shifting demand conditions, but the general trend is growth over the five-year span.
- Property, Plant and Equipment (net)
- Investment in property, plant, and equipment, net of accumulated depreciation, increased steadily from 4,285 million US dollars in the first quarter of 2018 to 10,617 million US dollars by the first quarter of 2023. This consistent rise suggests ongoing capital expenditure and expansion in physical assets, reflecting potential strategic initiatives or capacity enhancements. The growth rate appears particularly accelerated from 2018 through 2022.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio, indicating efficiency in using fixed assets to generate sales, displays a declining trend from approximately 4.72 at the end of 2018 to around 3.49 by the first quarter of 2023. This decrease suggests that while the company has been increasing its fixed asset base, the rate of sales generation relative to these assets has diminished. This trend could imply reduced asset utilization efficiency or that asset expansion is outpacing sales growth.
- Summary of Insights
- Overall, the financial data reveals a company with growing sales and expanding asset base over the medium term. However, the decreasing net fixed asset turnover ratio indicates potential challenges in leveraging these assets efficiently for revenue generation. The periodic sales fluctuations post-2020 may warrant further analysis into market or operational factors influencing performance. The consistent increase in property, plant and equipment investment highlights a strategic focus on asset growth, which may require enhanced operational effectiveness to fully capitalize on the investments.
Total Asset Turnover
Northrop Grumman Corp., total asset turnover calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Sales | 9,301) | 10,033) | 8,971) | 8,801) | 8,797) | 8,639) | 8,720) | 9,151) | 9,157) | 10,212) | 9,083) | 8,884) | 8,620) | 8,721) | 8,475) | 8,456) | 8,189) | 8,156) | 8,085) | 7,119) | 6,735) | |||||||
| Total assets | 44,244) | 43,755) | 42,733) | 41,914) | 41,903) | 42,579) | 42,346) | 42,142) | 41,423) | 44,469) | 44,772) | 43,475) | 43,203) | 41,089) | 40,553) | 39,584) | 39,751) | 37,653) | 37,943) | 37,378) | 34,795) | |||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||||
| Total asset turnover1 | 0.84 | 0.84 | 0.82 | 0.83 | 0.84 | 0.84 | 0.88 | 0.89 | 0.90 | 0.83 | 0.79 | 0.80 | 0.79 | 0.82 | 0.82 | 0.83 | 0.79 | 0.80 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Total Asset Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Boeing Co. | 0.52 | 0.49 | 0.45 | 0.45 | 0.45 | 0.45 | 0.43 | 0.41 | 0.38 | 0.38 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 0.70 | 0.69 | 0.66 | 0.63 | 0.61 | 0.58 | 0.57 | 0.53 | 0.50 | 0.50 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 0.60 | 0.59 | 0.59 | 0.56 | 0.56 | 0.58 | 0.57 | 0.52 | 0.52 | 0.56 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 0.43 | 0.39 | 0.40 | 0.39 | 0.37 | 0.36 | 0.30 | 0.30 | 0.29 | 0.29 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 0.60 | 0.57 | 0.58 | 0.55 | 0.54 | 0.53 | 0.54 | 0.53 | 0.51 | 0.51 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 1.21 | 1.25 | 1.24 | 1.24 | 1.28 | 1.32 | 1.28 | 1.28 | 1.28 | 1.29 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.42 | 0.42 | 0.42 | 0.41 | 0.41 | 0.40 | 0.40 | 0.39 | 0.38 | 0.35 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Total asset turnover
= (SalesQ1 2023
+ SalesQ4 2022
+ SalesQ3 2022
+ SalesQ2 2022)
÷ Total assets
= (9,301 + 10,033 + 8,971 + 8,801)
÷ 44,244 = 0.84
2 Click competitor name to see calculations.
The sales figures demonstrate a generally upward trend over the observed periods, with some fluctuations. Starting at 6,735 million US dollars in the first quarter of 2018, sales peaked notably at 10,212 million US dollars in the fourth quarter of 2020. Following this peak, sales show a degree of volatility, decreasing through 2021 and early 2022, but begin to recover again by the end of 2022 and early 2023, reaching 9,301 million US dollars in the first quarter of 2023.
Total assets generally increased from 34,795 million US dollars at the beginning of 2018 to 44,244 million US dollars by the first quarter of 2023. The increase was steady with moderate growth over the years, although slight decreases are visible towards late 2020 and 2021. After these dips, total assets appear to regain growth momentum through 2022 and early 2023.
The total asset turnover ratio, available from the third quarter of 2018 onward, remained relatively stable within a narrow range, fluctuating between approximately 0.79 and 0.90. The highest turnover ratio was observed in the first quarter of 2021 at 0.90, while the lowest ratios around 0.79 occurred multiple times in the dataset. This suggests consistent efficiency in using asset base to generate sales throughout the periods, with a peak indicating slightly improved operational efficiency during early 2021.
In summary, sales show progressive growth interrupted by volatility post-2020, total assets steadily increase with some minor declines, and asset turnover maintains a stable pattern indicating consistent asset utilization efficiency. The temporary increase in asset turnover in early 2021 may indicate a period of improved operational performance relative to the asset base.
- Sales
- Overall growth trend with a notable peak in late 2020 followed by fluctuations and a recovery phase through 2022 into early 2023.
- Total Assets
- Steady increase over the period with minor declines in late 2020 and 2021, recovering afterwards.
- Total Asset Turnover
- Stable performance around 0.8 with a peak efficiency in early 2021 indicating consistent asset utilization.
Equity Turnover
Northrop Grumman Corp., equity turnover calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Sales | 9,301) | 10,033) | 8,971) | 8,801) | 8,797) | 8,639) | 8,720) | 9,151) | 9,157) | 10,212) | 9,083) | 8,884) | 8,620) | 8,721) | 8,475) | 8,456) | 8,189) | 8,156) | 8,085) | 7,119) | 6,735) | |||||||
| Shareholders’ equity | 15,136) | 15,312) | 13,943) | 13,651) | 13,287) | 12,926) | 11,417) | 11,172) | 10,525) | 10,579) | 10,467) | 9,712) | 9,062) | 8,819) | 9,731) | 9,214) | 8,739) | 8,187) | 9,103) | 8,227) | 7,680) | |||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||||
| Equity turnover1 | 2.45 | 2.39 | 2.53 | 2.56 | 2.66 | 2.76 | 3.26 | 3.37 | 3.55 | 3.48 | 3.37 | 3.57 | 3.78 | 3.84 | 3.42 | 3.57 | 3.61 | 3.68 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Equity Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 3.24 | 3.57 | 3.45 | 3.26 | 2.92 | 2.92 | 2.74 | 2.57 | 2.43 | 2.55 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 1.23 | 1.22 | 1.26 | 1.21 | 1.19 | 1.20 | 1.22 | 1.24 | 1.18 | 1.20 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 2.24 | 2.02 | 2.29 | 2.06 | 1.82 | 1.76 | 1.92 | 2.15 | 2.10 | 2.05 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 2.13 | 2.12 | 1.97 | 1.96 | 1.87 | 1.85 | 1.94 | 1.89 | 1.81 | 1.86 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 6.86 | 7.12 | 5.41 | 5.61 | 6.57 | 6.12 | 6.89 | 10.24 | 10.46 | 10.87 | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 0.94 | 0.92 | 0.94 | 0.93 | 0.89 | 0.88 | 0.89 | 0.88 | 0.84 | 0.78 | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q1 2023 Calculation
Equity turnover
= (SalesQ1 2023
+ SalesQ4 2022
+ SalesQ3 2022
+ SalesQ2 2022)
÷ Shareholders’ equity
= (9,301 + 10,033 + 8,971 + 8,801)
÷ 15,136 = 2.45
2 Click competitor name to see calculations.
- Sales Trend Analysis
- Over the period examined, sales figures demonstrate overall growth with some fluctuations. Starting at 6,735 million USD in the first quarter of 2018, sales experienced a steady rise through 2018 and 2019, reaching a peak of 10,212 million USD in the last quarter of 2020. This peak represents a significant increase compared to prior quarters. Following this high point, a downward trend is observed in 2021, with sales falling consistently to 8,639 million USD by the last quarter of that year. The subsequent periods through 2023 show signs of recovery, reaching 10,033 million USD in the first quarter of 2023, though sales slightly dipped once more to 9,301 million USD by the last reported quarter.
- Shareholders’ Equity Analysis
- Shareholders' equity displays a generally positive upward trajectory throughout the entire timeline. Starting at 7,680 million USD in early 2018, it increased steadily to reach 10,579 million USD by the end of 2020. This trend continued into 2021 and 2022, with equity rising progressively and peaking at 15,312 million USD in the first quarter of 2023. A minor decrease is noted in the last quarter of data, with shareholders’ equity slightly declining to 15,136 million USD. Overall, the equity growth reflects strengthening financial stability or accumulating retained earnings during this period.
- Equity Turnover Ratio Analysis
- The equity turnover ratio, available from the third quarter of 2018 onward, shows a declining trend over the observed periods. Initial ratios were relatively high, around 3.68 in the third quarter of 2018, indicating efficient use of shareholders' equity to generate sales. However, there is a consistent decrease thereafter, reaching a low of 2.39 in the first quarter of 2023. This reduction suggests that sales growth has slowed relative to the growth in shareholders’ equity, implying either an increase in equity not matched by proportional sales growth or a decline in sales efficiency over time.
- Summary of Relationships and Insights
- The data reveal that while sales show periods of volatility with peaks and troughs, shareholders’ equity steadily appreciates, indicating stronger capitalization or retained earnings accumulation. The declining equity turnover ratio implies that despite higher equity levels, the company's ability to generate sales per unit of equity has gradually diminished over the analyzed quarters. This could suggest an area for operational improvement or reflect strategic decisions involving equity increases without immediate corresponding revenue increases.