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.
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- Income Statement
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Debt to Equity since 2005
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Long-term Activity Ratios (Summary)
Raytheon Co., long-term (investment) activity ratios
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- Net Fixed Asset Turnover
- The net fixed asset turnover exhibits a clear downward trend over the five-year period, declining from 11.59 in 2015 to 8.7 in 2019. This indicates that the company is generating less revenue per unit of net fixed assets each year, suggesting either an increase in fixed asset base without a proportional increase in sales or reduced efficiency in using fixed assets.
- Net Fixed Asset Turnover Including Operating Lease, Right-of-Use Asset
- This metric mirrors the general decrease observed in net fixed asset turnover from 2015 through 2018, moving from 11.59 down to 9.53. However, in 2019, there is a pronounced drop to 6.9, which is significantly lower than the traditional net fixed asset turnover figure. This sharp reduction likely reflects the recognition of operating leases as right-of-use assets in 2019, increasing the asset base and thereby reducing the turnover ratio.
- Total Asset Turnover
- Total asset turnover shows a slight upward movement from 0.79 in 2015 to a peak of 0.85 in 2018, followed by a marginal decline to 0.84 in 2019. This illustrates a relatively stable efficiency in utilizing the company's total assets to generate sales, with minor fluctuations but no substantial deterioration or improvement over the examined timeframe.
- Equity Turnover
- Equity turnover increases steadily from 2.3 in 2015 to 2.54 in 2017, indicating improved sales relative to shareholders' equity during this period. Nevertheless, a moderate decrease to 2.36 occurs in 2018, with a minor rebound to 2.39 in 2019. Overall, the equity turnover remains within a narrow range, reflecting consistent efficiency in the use of equity to produce revenue despite some volatility.
Net Fixed Asset Turnover
Raytheon Co., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Property, plant and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Net fixed asset turnover = Net sales ÷ Property, plant and equipment, net
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales demonstrated a consistent upward trend over the five-year period. Beginning at 23,247 million US dollars in 2015, sales increased annually to reach 29,176 million US dollars by 2019. This steady growth indicates ongoing expansion in revenue generation.
- Property, Plant, and Equipment, Net
- The net value of property, plant, and equipment rose progressively from 2,005 million US dollars in 2015 to 3,353 million US dollars in 2019. This increase reflects continuous investment in long-term assets each year, with notable acceleration in asset growth especially in the latter years.
- Net Fixed Asset Turnover
- Net fixed asset turnover exhibited a declining trend throughout the period, decreasing from 11.59 in 2015 to 8.70 in 2019. This ratio decline suggests that the efficiency in utilizing fixed assets to generate sales diminished over time, despite the growth in total sales. The reduction implies that sales growth did not keep pace proportionally with asset base expansion.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Raytheon Co., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Property, plant and equipment, net | ||||||
| Operating lease right-of-use assets | ||||||
| Property, plant and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Net sales ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
The annual financial data reveals several notable trends over the five-year period.
- Net Sales
- There is a consistent upward trend in net sales from 2015 to 2019. The net sales increased steadily each year, rising from 23,247 million US dollars in 2015 to 29,176 million US dollars in 2019. This indicates a sustained growth in revenue generation over the period analyzed.
- Property, Plant and Equipment, Net (Including Operating Lease, Right-of-Use Asset)
- The value of property, plant, and equipment experienced a continuous increase throughout the years. Starting at 2,005 million US dollars in 2015, it rose gradually to 4,228 million US dollars by 2019. The acceleration in growth was particularly marked between 2018 and 2019, suggesting significant capital investment or acquisitions in that year.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- The net fixed asset turnover ratio exhibited a declining trend across the years. It decreased from 11.59 in 2015 to 6.9 in 2019, reflecting a reduction in the efficiency with which the company utilized its fixed assets to generate sales. This decline corresponds with the sharp increase in the net fixed assets base, which outpaced the rate of sales growth.
Overall, while the company showed healthy growth in sales and expanded its asset base substantially, the diminishing net fixed asset turnover ratio signals a potential decrease in asset productivity. This may warrant further investigation into asset management and deployment strategies to support sustained efficiency and profitability.
Total Asset Turnover
Raytheon Co., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Total asset turnover = Net sales ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several key trends over the five-year period from 2015 to 2019.
- Net Sales
- Net sales demonstrate a consistent and steady increase each year, rising from 23,247 million US dollars in 2015 to 29,176 million US dollars in 2019. This upward trend indicates growing revenue generation over the period.
- Total Assets
- Total assets also show a gradual increase, moving from 29,281 million US dollars in 2015 to 34,566 million US dollars in 2019. The growth in assets suggests ongoing investment or accumulation of resources, supporting the company’s expanding operations.
- Total Asset Turnover
- The total asset turnover ratio exhibits a slight upward trend from 0.79 in 2015 to a peak of 0.85 in 2018, followed by a minor decline to 0.84 in 2019. This pattern indicates improved efficiency in using assets to generate sales up to 2018, with a marginal reduction in efficiency thereafter, though still higher than at the beginning of the period.
Overall, the data reflect a period of growth in sales and assets, accompanied by generally improved asset utilization efficiency, pointing toward positive operational performance and expansion efforts.
Equity Turnover
Raytheon Co., equity turnover calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Total Raytheon Company stockholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Equity turnover = Net sales ÷ Total Raytheon Company stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- The net sales exhibited a consistent upward trajectory over the five-year period. Starting at $23,247 million in 2015, net sales grew steadily each year to reach $29,176 million by the end of 2019. This represents an approximate increase of 25% over the period, indicating sustained revenue growth for the company.
- Total Stockholders’ Equity
- Total stockholders’ equity showed slight fluctuations in the initial years, declining marginally from $10,128 million in 2015 to $9,963 million in 2017. However, it rebounded strongly from 2017 onwards, reaching $12,223 million by the close of 2019. This reflects an overall positive trend in equity, with growth evident particularly in the last two years, suggesting increased retained earnings or capital infusion.
- Equity Turnover Ratio
- The equity turnover ratio, which measures revenue generated per unit of equity, ranged between 2.3 and 2.54 across the years. It increased from 2.3 in 2015 to a peak of 2.54 in 2017, indicating improving efficiency in using equity to generate sales during the early part of the period. However, this ratio declined to 2.36 in 2018 before slightly rising to 2.39 in 2019. These fluctuations suggest some variability in operational efficiency but overall moderate stability in generating sales from equity.