Parker-Hannifin Corp. (NYSE:PH)

The analysis of the annual financial data reveals significant variability in the composition of assets over the six-year period ending June 30, 2022.

Cash and cash equivalents

This category shows a fluctuating trend, with a notable peak in June 30, 2019, reaching 18.32% of total assets. Subsequently, it declined sharply, reaching a low of 2.07% by June 30, 2022. The initial decline after 2019 suggests a reduction in readily available liquidity relative to total assets.

Marketable securities and other investments

These assets remained a small proportion of total assets throughout the period, peaking modestly at 0.86% in 2019, but decreasing thereafter to only 0.11% by 2022, indicating a minimal emphasis on this asset category.

Trade accounts receivable, net

There is a decreasing trend in trade receivables as a percentage of total assets, dropping from 14.00% in 2018 to 9.03% in 2022. This decline could imply improved receivables management or changes in sales terms or volume.

Non-trade and notes receivable

This item experienced a modest increase over the period, from 1.65% in 2017 to 2.10% in 2022, suggesting a slight rise in non-operational receivables or advances.

Inventories

Inventory levels remained fairly stable, fluctuating slightly but generally declining from 10.58% in 2018 to 8.54% in 2022, indicating modest inventory management or changes in production and sales mix.

Prepaid expenses and other

A marked anomaly appears in this category, with a sharp increase to 24.6% of total assets by 2022, up from marginal values around 1% in previous years. This significant rise suggests a major reclassification or accumulation of prepaid items or other current assets, warranting further investigation.

Current assets

Current assets as a whole showed considerable variability, peaking at 46.43% in 2022, largely influenced by the surge in prepaid expenses and other current assets. Earlier years showed a decline in current assets from 43.65% in 2019 to 24.75% in 2020, potentially reflecting operational or strategic shifts.

Property, plant and equipment, net

Fixed assets declined steadily from 12.51% in 2017 to 8.18% in 2022, signaling potential asset sales, depreciation outpacing capital expenditures, or operational restructuring.

Deferred income taxes

This asset category remained relatively low and stable throughout the period, fluctuating narrowly between 0.23% and 0.86%, indicating limited impact on total asset composition.

Investments and other assets

There was a gradual decline from 5.44% in 2017 to 3.04% in 2022, reflecting a reduced allocation to long-term investments or other non-operating assets.

Intangible assets, net

Intangibles showed a notable peak at 19.25% in 2020, rising from 10.15% in 2019, before declining to 12.09% by 2022. This fluctuation might be linked to acquisition activity or impairment charges during the period.

Goodwill

Goodwill represented the largest component of assets, consistently substantial but decreasing from 39.87% in 2020 to 29.83% in 2022. The downward trend after 2020 may indicate write-downs or disposals reducing goodwill balances.

Noncurrent assets

Noncurrent assets showed an inverse trend to current assets, peaking at 75.25% in 2020 and declining to 53.57% by 2022. This shift aligns with the large increase in current assets, particularly prepaid expenses, indicating a material change in asset classification or structure.

Overall, the data demonstrates dynamic changes in asset composition with a pronounced shift towards current assets, especially prepaid expenses, by 2022. Declines in goodwill, intangible assets, and fixed assets suggest possible impairments or divestitures. Trade receivables and inventories declined moderately, reflecting operational adjustments. These trends highlight an evolving asset structure that may influence liquidity, capital investment, and risk profiles.