Analysis of Geographic Areas
Parker-Hannifin Corp. operates in 2 regions: North America and International.
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Current Ratio since 2005
- Price to Earnings (P/E) since 2005
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Area Asset Turnover
Parker-Hannifin Corp., asset turnover by geographic area
| Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | |
|---|---|---|---|---|---|---|
| North America | ||||||
| International |
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
- North America Asset Turnover
- Between June 30, 2017, and June 30, 2019, there was a continuous upward trend in asset turnover ratios, increasing from 6.62 to 8.86. This reflects improving efficiency in the utilization of assets in this region during this period. However, a sharp decline occurred in the fiscal year ending June 30, 2020, with the ratio dropping to 6.13, suggesting a significant reduction in asset productivity. Following this decline, the ratio stabilized and registered a modest recovery, increasing to 7.3 by June 30, 2022.
- International Asset Turnover
- The international asset turnover ratio also demonstrated an overall upward pattern, starting at 5.61 in 2017 and rising to 7.07 in 2018. There was a slight dip to 6.99 in 2019, followed by a notable decrease to 5.68 in 2020, paralleling the trend seen in North America. Subsequently, this ratio improved steadily over the next two years, reaching 7.8 by 2022, which is the highest value observed in the given timeframe.
- Comparative Insights
- Both geographic areas experienced peak asset turnover ratios prior to 2020, followed by a pronounced decline during 2020, likely reflective of broader economic or operational challenges during that period. The recovery phase post-2020 shows both regions regaining momentum, with international asset turnover surpassing North America by the end of the reporting period. Overall, the data suggests resilience and operational improvement after the 2020 downturn, with international operations exhibiting a relatively stronger rebound.
Area Asset Turnover: North America
Parker-Hannifin Corp.; North America; area asset turnover calculation
| Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | ||||||
| Long-lived assets | ||||||
| Area Activity Ratio | ||||||
| Area asset turnover1 | ||||||
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
1 2022 Calculation
Area asset turnover = Net sales ÷ Long-lived assets
= ÷ =
- Net Sales
- Net sales in the North America geographic area demonstrated an overall upward trend over the six-year period. Starting from approximately $7.59 billion in mid-2017, sales increased steadily each year, reaching a peak of about $10.22 billion in mid-2022. There was a slight decline observed in 2020 and 2021, with net sales decreasing from roughly $9.32 billion in 2019 to $9.17 billion in 2020 and further to $9.05 billion in 2021, before recovering strongly in 2022.
- Long-lived Assets
- The value of long-lived assets exhibited some fluctuations during the period. Starting at approximately $1.15 billion in 2017, the asset base decreased gradually to around $1.05 billion by 2019. However, a significant increase occurred in 2020, with assets rising sharply to about $1.49 billion. This elevated level was maintained with minor decreases in 2021 and 2022, settling close to $1.40 billion by mid-2022.
- Area Asset Turnover Ratio
- The asset turnover ratio showed variability across the years, indicating changes in the efficiency of asset utilization. The ratio improved from 6.62 in 2017 to a peak of 8.86 in 2019, suggesting increased sales generated per dollar of assets. Subsequently, there was a notable decline in 2020 to 6.13, reflecting reduced efficiency, possibly related to the increase in asset base and decreased sales. Slight recovery occurred in 2021 with a ratio of 6.25, followed by a stronger improvement to 7.3 in 2022, indicating a more effective deployment of assets relative to sales.
- Summary Insights
- The data reveals a general growth trajectory in sales alongside fluctuations in asset levels and efficiency. The surge in long-lived assets in 2020, coinciding with a dip in sales, led to a decrease in asset turnover, which improved as sales rebounded in 2022. This suggests strategic investment or acquisition of assets during 2020, with gradual realization of productivity gains in subsequent years.
Area Asset Turnover: International
Parker-Hannifin Corp.; International; area asset turnover calculation
| Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | ||||||
| Long-lived assets | ||||||
| Area Activity Ratio | ||||||
| Area asset turnover1 | ||||||
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
1 2022 Calculation
Area asset turnover = Net sales ÷ Long-lived assets
= ÷ =
- Net Sales
- Net sales displayed variability over the observed periods. Starting at approximately 4.44 billion US dollars in mid-2017, there was an increase to about 5.32 billion in mid-2018, followed by a decline to approximately 5.00 billion in mid-2019. A further decrease is observed in mid-2020, reaching around 4.53 billion, likely reflective of challenging market conditions. Subsequently, net sales rebounded significantly to roughly 5.30 billion in mid-2021, continuing the upward trajectory to approximately 5.65 billion in mid-2022. This pattern indicates a recovery phase after a downturn, culminating in the highest sales recorded in the period under review.
- Long-lived Assets
- The value of long-lived assets showed a downward trend across the majority of the analyzed periods with some recovery. Beginning at about 792 million US dollars in mid-2017, there was a consistent decline to approximately 716 million by mid-2019. However, an increase occurred in mid-2020, rising to around 798 million, continuing to increase slightly to about 818 million by mid-2021. The most recent figure in mid-2022, however, shows a decrease to approximately 724 million. This fluctuation suggests possible asset disposals or revaluations in the earlier years, followed by reinvestment or acquisition periods, and then a reduction again in the latest period.
- Area Asset Turnover Ratio
- The area asset turnover ratio, which measures the efficiency in using assets to generate sales, exhibited moderate volatility. It started at 5.61 in mid-2017, increased sharply to 7.07 in mid-2018, remaining relatively stable at 6.99 in mid-2019. The ratio then fell to 5.68 in mid-2020, aligning with the dip in sales and value of assets during that time. A recovery trend is seen in the following years, with the ratio rising to 6.48 in mid-2021 and reaching a peak of 7.80 in mid-2022. This progression indicates an improving efficiency in utilizing assets to generate sales towards the latter part of the timeline, potentially reflecting better management practices or operational improvements after the 2020 downturn.
Net sales
Parker-Hannifin Corp., net sales by geographic area
US$ in thousands
| Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | |
|---|---|---|---|---|---|---|
| North America | ||||||
| International | ||||||
| Total |
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
- North America Net Sales
- The net sales in North America exhibit an overall upward trend over the six-year period from 2017 to 2022. Starting at approximately 7.59 billion US dollars in 2017, sales increased significantly to about 8.98 billion in 2018, continuing to grow to around 9.32 billion in 2019. There was a slight decline in 2020 and 2021, with sales dropping to roughly 9.17 billion and 9.05 billion respectively. However, 2022 saw a notable recovery and new peak at approximately 10.22 billion, the highest in the observed timeframe.
- International Net Sales
- International net sales demonstrated more volatility within the period. Beginning at about 4.44 billion US dollars in 2017, sales increased to 5.32 billion in 2018 before declining to 5.00 billion in 2019. The downward trend continued into 2020 with a further drop to approximately 4.53 billion. A rebound occurred in 2021 with sales rising to approximately 5.30 billion, followed by a moderate increase to about 5.65 billion in 2022. Despite fluctuations, the international segment closed the period with higher sales than the initial year.
- Total Net Sales
- Total net sales reflect the aggregate effects of the regional trends, showing general growth with some fluctuations. Beginning at roughly 12.03 billion US dollars in 2017, total sales increased substantially to approximately 14.30 billion in 2018 and remained stable around 14.32 billion in 2019. There was a decline in 2020 to about 13.70 billion, coinciding with the regional decreases, followed by recovery in 2021 to 14.35 billion. The upward momentum continued, reaching a new high of roughly 15.86 billion in 2022. Overall, total net sales grew by over 31% from 2017 to 2022.
- Summary of Trends
- The data reveals that North America represents the larger portion of net sales and largely drives the total sales trend, with a consistent recovery after the 2020 dip. International sales exhibit cyclical patterns with more pronounced fluctuations, but eventually contribute to growth in total sales. The year 2020 marks a downturn across both regions, likely indicative of an external disruptive event impacting sales. Recovery and growth resumed in 2021 and gained further strength in 2022, culminating in record sales figures for the period under review.
Long-lived assets
Parker-Hannifin Corp., long-lived assets by geographic area
US$ in thousands
| Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | |
|---|---|---|---|---|---|---|
| North America | ||||||
| International | ||||||
| Total |
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
The analysis of long-lived assets by geographic area reveals several notable trends over the period from June 30, 2017, to June 30, 2022.
- North America
- The value of long-lived assets in North America exhibits an initially declining trend from 1,145,127 thousand US dollars in 2017 to 1,052,263 thousand US dollars in 2019. This is followed by a significant increase in 2020, reaching 1,494,858 thousand US dollars, which marks the highest value within the observed timeframe. Subsequently, values decreased gradually in 2021 and 2022, ending at 1,398,966 thousand US dollars. Despite the fluctuations, the asset values in 2021 and 2022 remain substantially higher than the levels observed in the three years prior to 2020.
- International
- International long-lived assets show a steady decline from 792,165 thousand US dollars in 2017 to 716,024 thousand US dollars in 2019. A rebound is observed in 2020 and 2021, with values increasing to 797,877 and 818,367 thousand US dollars, respectively. However, in 2022, the international assets decreased again to 723,792 thousand US dollars. The figures suggest a cyclical pattern, with a recovery phase during 2020-2021 that does not sustain into 2022.
- Total Long-Lived Assets
- The total long-lived assets reflect a combined effect of the regional trends. The overall asset base declined from approximately 1,937,292 thousand US dollars in 2017 to 1,768,287 thousand US dollars in 2019. Following this period, there is a marked increase in 2020, peaking at 2,292,735 thousand US dollars, before slightly declining to 2,266,476 thousand US dollars in 2021 and further to 2,122,758 thousand US dollars in 2022. The total asset values in 2020 through 2022 stay above the initial years measured, indicating an expansion phase post-2019 with some retrenchment in the most recent year.
In summary, the data exhibits a distinct dip in long-lived assets across both geographic segments during the initial years, with the lowest values appearing around 2019. This is followed by a substantial recovery in 2020, suggesting increased investment or capital allocation to long-lived assets in that year. Although there is some decline in 2021 and 2022, asset levels remain elevated relative to the earlier period. The North American segment shows more pronounced volatility with a greater magnitude of increase and subsequent decrease, while the International segment experiences more moderate fluctuations. These patterns may indicate regional differences in investment strategies or market conditions affecting asset capitalization during the period analyzed.