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.
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- Statement of Comprehensive Income
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Common Stock Valuation Ratios
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Price to Earnings (P/E) since 2014
- Price to Operating Profit (P/OP) since 2014
- Analysis of Revenues
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Long-term Activity Ratios (Summary)
Paycom Software Inc., long-term (investment) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 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).
The analysis of the financial ratios over the reported periods reveals several noteworthy trends in operational efficiency and financial management.
- Net Fixed Asset Turnover
- This ratio demonstrates a generally declining trend from early 2019 through 2020, decreasing from 3.27 to around 2.95. Starting in 2021, the ratio shows a consistent recovery and improvement, reaching 3.48 by the third quarter of 2023. This suggests an initial reduction in the efficiency of fixed asset utilization, followed by a marked enhancement in asset turnover efficiency in recent periods.
- Total Asset Turnover
- The total asset turnover ratio exhibits volatility across the quarters with no clear linear trend. It peaks notably during mid-2019 and late 2022 to 2023, with a maximum of 0.44 in September 2019 and gradual improvements from late 2022 into 2023 reaching 0.42 in September 2023. However, periods with lower turnover, such as early 2022 (0.21), indicate fluctuations in overall asset utilization efficiency, reflecting variable asset management performance or changes in asset base and revenue generation.
- Equity Turnover
- This ratio shows a gradual decline from 1.54 in March 2019 to around 1.10 in mid-2023, indicating diminishing sales generated per unit of equity over time. The decline is steady but moderate, with some small oscillations particularly noticeable in the 2021 to 2023 timeframe. This trend may suggest either a relative increase in equity base or slower revenue growth relative to equity growth.
In summary, the company experienced initial challenges with asset efficiency as seen in net fixed asset turnover but subsequently improved significantly. The total asset turnover ratio reflects irregular asset use effectiveness with some recent positive developments. Meanwhile, the equity turnover trend points to a decreasing intensity in revenue generation per equity dollar invested, which may warrant further monitoring of the capital structure and profitability dynamics.
Net Fixed Asset Turnover
Paycom Software Inc., net fixed asset turnover calculation (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 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).
1 Q3 2023 Calculation
Net fixed asset turnover
= (RevenuesQ3 2023
+ RevenuesQ2 2023
+ RevenuesQ1 2023
+ RevenuesQ4 2022)
÷ Property and equipment, net
= ( + + + )
÷ =
The analysis of the quarterly financial data reveals multiple patterns and trends spanning from the first quarter of 2019 through the third quarter of 2023. The focus on revenues, net property and equipment, and net fixed asset turnover provides insights into operational growth, asset utilization, and efficiency over this period.
- Revenues
- Revenues demonstrated a general upward trend with some fluctuations throughout the period in question. Initial revenues started at approximately $200 million in the first quarter of 2019. There was a decline by mid-2019, followed by a recovery and marked growth into 2020. Notably, revenues surged significantly starting in the first quarter of 2021, reaching a peak of around $451.6 million in the first quarter of 2023. After this peak, slight decreases were recorded but overall maintaining levels above $400 million through the third quarter of 2023. This suggests sustained demand and possible expansion in market reach or pricing power.
- Property and Equipment, Net
- The net value of property and equipment increased steadily over the entire timeframe, reflecting continuous investment in fixed assets. Beginning at about $187.5 million in early 2019, there was a consistent upward trajectory, culminating in an amount nearing $468.3 million by the third quarter of 2023. The steady increase indicates ongoing capital expenditure aimed at supporting the company’s operational capacity and future growth.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio, which measures how effectively the company generates revenues from its fixed assets, exhibited some variability. Initially, the ratio was at 3.27 in early 2019 and declined gradually to around 2.95 by the end of 2020, suggesting a deceleration in revenue generation relative to asset base expansion. However, from 2021 onward, the ratio rebounded, steadily increasing to a high of about 3.5 during 2023, before a minor decline to 3.48 in the last reported quarter. This improvement signals enhanced efficiency in asset utilization, likely driven by stronger revenue growth relative to the increase in fixed assets.
In summary, the company appears to have strategically expanded its asset base while simultaneously achieving significant revenue growth, particularly in recent years. The rising net fixed asset turnover ratio during the latter part of the period indicates improved operational efficiency, suggesting that assets are being leveraged more effectively to generate sales. The steady increase in property and equipment alongside robust revenue growth highlights a growth-oriented approach with attention to capital investment and operational productivity.
Total Asset Turnover
Paycom Software Inc., total asset turnover calculation (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 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).
1 Q3 2023 Calculation
Total asset turnover
= (RevenuesQ3 2023
+ RevenuesQ2 2023
+ RevenuesQ1 2023
+ RevenuesQ4 2022)
÷ Total assets
= ( + + + )
÷ =
The financial data over the periods analyzed reveals notable fluctuations and trends in key financial metrics.
- Revenues
- Revenues demonstrate a general upward trajectory from March 31, 2019, to September 30, 2023. Starting at approximately 200 million USD, revenues exhibit some volatility within quarters, dipping occasionally but recovering strongly in subsequent periods. The most significant increases are observed in the years 2021 through 2023, with quarterly revenues reaching a peak of over 451 million USD by March 31, 2023. Despite periodic declines, the long-term revenue growth is evident.
- Total Assets
- Total assets show a less consistent pattern, with considerable variability over the time series. Beginning near 2 billion USD in early 2019, total assets peaked notably at over 5.4 billion USD around March 31, 2022. However, subsequent quarters saw a decline, with assets falling closer to 3.85 billion USD by September 30, 2023. The lack of a steady growth trend indicates fluctuating asset management or acquisitions and disposals impacting the balance sheet.
- Total Asset Turnover
- The total asset turnover ratio, which measures the efficiency of using assets to generate revenue, fluctuates between approximately 0.2 and 0.44 across the periods. Early 2019 starts with lower turnover around 0.3 but improves to peaks near 0.44 by late 2019 and again towards the end of the timeframe in 2023. Several quarters show declines below 0.3, reflecting periods where asset utilization was less effective. This variability suggests intermittent changes in operational efficiency or asset base adjustments relative to revenue generation.
In summary, revenue growth is robust with some volatility, total assets display significant variation without a consistent trend, and asset turnover ratios indicate fluctuating efficiency in asset use. The data implies strategic shifts impacting asset composition and operational effectiveness, with a positive outlook drawn from increasing revenues and improving asset turnover ratios in recent periods.
Equity Turnover
Paycom Software Inc., equity turnover calculation (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 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).
1 Q3 2023 Calculation
Equity turnover
= (RevenuesQ3 2023
+ RevenuesQ2 2023
+ RevenuesQ1 2023
+ RevenuesQ4 2022)
÷ Stockholders’ equity
= ( + + + )
÷ =
The quarterly financial data reveals several notable trends concerning revenues, stockholders’ equity, and equity turnover over the analyzed periods.
- Revenues
- Revenues demonstrate a general upward trend from the first quarter of 2019 through the third quarter of 2023. Initial fluctuations are visible, with some quarters showing declines compared to the preceding ones, notably during mid-2019 and mid-2020. However, starting from early 2021, there is a more consistent increase in revenues, reaching a peak in the first quarter of 2023 at 451,637 thousand US dollars. The growth appears robust, with occasional periods of moderate decline or plateauing but no extended downturns. This suggests an overall positive performance trajectory in the company's top-line results over the timeframe.
- Stockholders’ Equity
- Stockholders’ equity shows a steady and substantial increase throughout the entire period. The value grows from 398,553 thousand US dollars in the first quarter of 2019 to 1,421,309 thousand US dollars by the third quarter of 2023. This continuous growth indicates sustained accumulation of retained earnings and/or additional capital contributions. Minor fluctuations can be observed but do not detract from the overall positive trend. The increase in equity suggests strengthening of the company’s financial position and enhanced shareholder value over time.
- Equity Turnover Ratio
- The equity turnover ratio, which measures how efficiently the company uses its equity to generate revenues, shows a declining trend from 1.54 at the start of 2019 to lower values close to 1.1 by mid-2023. This gradual decrease indicates that while revenues have increased, the expansion of equity has outpaced revenue growth, leading to reduced efficiency in turning equity into sales. Minor short-term fluctuations occur, with slight increases during some quarters in 2021 and 2022, but these are not sufficient to reverse the overall downward trajectory. This pattern suggests that the growth in assets funded by equity has been proportionally greater than sales growth, which may merit further operational efficiency evaluation.