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)
Reynolds American Inc., long-term (investment) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
The analysis of turnover ratios over the presented quarterly periods reveals notable trends and shifts.
- Net Fixed Asset Turnover
- This ratio remained relatively stable from the first recorded quarter in March 2012 through to the end of 2013, hovering around values slightly above 11. Starting in 2014, a gradual decline is observed, reaching a low point near 9.64 by the third quarter of 2015. Following this dip, there is a marked recovery and an upward trend through 2016 and into the first quarter of 2017, where the ratio peaks at approximately 13.02 before a slight decrease to 12.42. This pattern indicates that asset utilization efficiency initially weakened but improved significantly over the latter periods analyzed.
- Total Asset Turnover
- The total asset turnover ratio exhibited moderate fluctuations within a narrow range between approximately 0.72 and 0.8 during 2012 to 2014, reflecting a stable asset use efficiency. However, beginning in early 2015, a sudden substantial decline occurs, with values dropping sharply to around 0.23 in March 2015. Subsequently, a gradual recovery is seen over the following quarters, with ratios climbing to near 0.33 by early 2017, though still not reaching the pre-2015 levels. This suggests a period of significantly reduced asset productivity starting in 2015, followed by a partial rebound.
- Equity Turnover
- Equity turnover remained fairly consistent and relatively high from 2012 through 2014, with ratios generally between 2.3 and 2.7, indicating efficient use of shareholder equity during this time. Starting in early 2015, a sharp decrease is evident, with ratios falling below 1.0, reaching a low around 0.68 in March 2015. After this decline, a moderate recovery occurs in 2015 and 2016, bringing the ratio closer to 0.78 by early 2017. The pattern demonstrates an initial strong equity utilization followed by a marked weakening and a partial recovery towards the end of the analysis period.
In summary, the data reveals a period of strong operational efficiency in asset and equity utilization up to 2014, which is followed by a pronounced decline across all turnover metrics beginning in early 2015. This deterioration suggests challenges impacting asset and equity productivity during that timeframe, with signs of stabilization and moderate improvement evident by the end of 2016 and early 2017. The robust recovery in net fixed asset turnover is particularly notable compared to the more modest gains in total asset and equity turnover ratios.
Net Fixed Asset Turnover
Reynolds American Inc., net fixed asset turnover calculation (quarterly data)
| Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Net sales, includes excise taxes | 3,931) | 4,254) | 4,330) | 4,315) | 3,947) | 4,216) | 4,381) | 3,390) | 2,897) | 3,024) | 3,202) | 3,089) | 2,781) | 2,959) | 3,107) | 3,162) | 2,738) | 3,057) | 3,110) | 3,204) | 2,856) | |||||||
| Property, plant and equipment, net of accumulated depreciation | 1,355) | 1,348) | 1,310) | 1,295) | 1,269) | 1,255) | 1,218) | 1,298) | 1,202) | 1,203) | 1,198) | 1,177) | 1,131) | 1,074) | 1,049) | 1,027) | 1,034) | 1,037) | 1,038) | 1,053) | 1,063) | |||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||||
| Net fixed asset turnover1 | 12.42 | 12.50 | 12.83 | 13.02 | 12.56 | 11.86 | 11.24 | 9.64 | 10.16 | 10.05 | 10.04 | 10.14 | 10.62 | 11.14 | 11.50 | 11.75 | 11.71 | 11.79 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Coca-Cola Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Mondelēz International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| PepsiCo Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Philip Morris International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q1 2017 Calculation
Net fixed asset turnover
= (Net sales, includes excise taxesQ1 2017
+ Net sales, includes excise taxesQ4 2016
+ Net sales, includes excise taxesQ3 2016
+ Net sales, includes excise taxesQ2 2016)
÷ Property, plant and equipment, net of accumulated depreciation
= (3,931 + 4,254 + 4,330 + 4,315)
÷ 1,355 = 12.42
2 Click competitor name to see calculations.
The data reflects quarterly financial performance and asset utilization ratios over a period from March 2012 to March 2017. Several trends can be observed across net sales, property, plant and equipment, and net fixed asset turnover.
- Net Sales
- Net sales demonstrate a fluctuating pattern with some notable variation year over year. Starting at $2,856 million in March 2012, sales increased to a peak around mid-2012, reaching over $3,200 million in June and September 2012. However, a decline is evident in early 2013, dropping to $2,738 million in March. Subsequently, net sales recovered somewhat in late 2013 and throughout 2014, hovering near the $3,000 million mark.
- A significant upward surge occurred beginning in 2015, where sales rose sharply especially in the third quarter (September 2015) to $4,381 million. This elevated level persisted through 2016, oscillating around $4,300 million, before dropping somewhat to $3,931 million by March 2017. Overall, the pattern suggests increased sales volatility with a strong growth phase starting mid-2015.
- Property, Plant and Equipment (PP&E), Net
- The net value of property, plant, and equipment remained relatively stable over the observed period, with a slight upward trajectory. From $1,063 million at the beginning of 2012, the net PP&E decreased marginally through 2012 and early 2013, reaching a low near $1,020 million mid-2013. Thereafter, there was a steady increase, climbing past $1,200 million in late 2014 and maintaining growth into 2016 and early 2017, peaking at $1,355 million in March 2017.
- This steady increase in net PP&E suggests consistent investments or maintenance in fixed assets, possibly in response to higher sales demand observed during the same timeframe.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover, which measures the efficiency in utilizing fixed assets to generate sales, began being reported from March 2013 onward. Initial ratios near 11.7 in early 2013 gradually decreased to approximately 10 by late 2014 and early 2015, indicating a reduction in asset utilization efficiency during that interval.
- However, from late 2015, the ratio increased significantly, reaching about 13 in late 2016 before experiencing a slight decline to near 12.4 in early 2017. The increased turnover ratio during this period aligns with the surge in net sales and relatively stable asset base, reflecting improved operational efficiency in leveraging fixed assets.
In summary, the company's sales experienced substantial growth starting mid-2015, supported by steady investments in fixed assets. The increase in net fixed asset turnover during the same period suggests enhanced asset productivity, likely contributing to the revenue growth. Earlier periods showed moderate sales with stable asset levels and slightly declining turnover ratios, pointing to less efficient asset utilization prior to 2015.
Total Asset Turnover
Reynolds American Inc., total asset turnover calculation (quarterly data)
| Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Net sales, includes excise taxes | 3,931) | 4,254) | 4,330) | 4,315) | 3,947) | 4,216) | 4,381) | 3,390) | 2,897) | 3,024) | 3,202) | 3,089) | 2,781) | 2,959) | 3,107) | 3,162) | 2,738) | 3,057) | 3,110) | 3,204) | 2,856) | |||||||
| Total assets | 51,959) | 51,095) | 51,792) | 51,772) | 54,408) | 53,224) | 53,774) | 54,558) | 15,850) | 15,196) | 15,332) | 15,301) | 15,799) | 15,402) | 16,592) | 15,532) | 16,778) | 16,557) | 15,394) | 15,234) | 16,672) | |||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||||
| Total asset turnover1 | 0.32 | 0.33 | 0.32 | 0.33 | 0.29 | 0.28 | 0.25 | 0.23 | 0.77 | 0.80 | 0.78 | 0.78 | 0.76 | 0.78 | 0.73 | 0.78 | 0.72 | 0.74 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Total Asset Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Coca-Cola Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Mondelēz International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| PepsiCo Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Philip Morris International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q1 2017 Calculation
Total asset turnover
= (Net sales, includes excise taxesQ1 2017
+ Net sales, includes excise taxesQ4 2016
+ Net sales, includes excise taxesQ3 2016
+ Net sales, includes excise taxesQ2 2016)
÷ Total assets
= (3,931 + 4,254 + 4,330 + 4,315)
÷ 51,959 = 0.32
2 Click competitor name to see calculations.
The analysis of the financial data reveals several noteworthy trends across the reported periods.
- Net Sales, Including Excise Taxes
- Net sales exhibited fluctuations over the observed intervals. Initially, sales increased from 2,856 million USD in March 2012 to a peak of approximately 3,204 million USD in June 2012, followed by a general decline towards the beginning of 2013, reaching 2,738 million USD by March 2013. Sales then showed a cyclical pattern with moderate increases and decreases through 2013 and 2014. Notably, there was a significant surge starting in the first quarter of 2015, peaking at 4,381 million USD in September 2015, before experiencing slight variations and stabilizing at approximately 4,254 million USD in September 2016. However, a downward trend is apparent toward March 2017, where sales fell to 3,931 million USD.
- Total Assets
- Total assets remained relatively stable from 2012 through early 2015, fluctuating around a range of approximately 15,000 to 17,000 million USD. A substantial increase occurred in 2015, with assets reaching 54,558 million USD in March 2015. This elevated level of assets persisted through 2016, maintaining figures around 51,000 to 54,000 million USD. By March 2017, assets slightly increased to 51,959 million USD. The dramatic rise in total assets starting in 2015 suggests notable investment, acquisition, or revaluation events during this period.
- Total Asset Turnover
- Total asset turnover, which reflects the efficiency of asset utilization to generate sales, shows two distinct periods. Prior to 2015, turnover ratios ranged between 0.72 and 0.80, indicating relatively consistent asset use efficiency. Beginning in 2015, the turnover ratio dropped sharply to around 0.23 and then gradually increased through 2016, reaching approximately 0.33 by the end of 2016. This decline followed by gradual recovery suggests that while assets increased substantially in 2015, sales growth did not immediately keep pace, reducing turnover efficiency. The subsequent rise implies improving utilization of the enlarged asset base over time.
Overall, the data indicates a phase of steady financial activity with moderate sales and asset levels until 2015, followed by significant asset growth accompanied by initial decreases in efficiency metrics. Sales volumes correspondingly increased but with some volatility. The post-2015 period reflects transitional dynamics possibly due to corporate structural changes or strategic investments that influenced asset size and operational performance.
Equity Turnover
Reynolds American Inc., equity turnover calculation (quarterly data)
| Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Net sales, includes excise taxes | 3,931) | 4,254) | 4,330) | 4,315) | 3,947) | 4,216) | 4,381) | 3,390) | 2,897) | 3,024) | 3,202) | 3,089) | 2,781) | 2,959) | 3,107) | 3,162) | 2,738) | 3,057) | 3,110) | 3,204) | 2,856) | |||||||
| Shareholders’ equity | 21,706) | 21,711) | 21,544) | 21,400) | 21,163) | 18,252) | 18,477) | 18,326) | 4,519) | 4,522) | 4,993) | 4,895) | 5,013) | 5,167) | 5,080) | 5,096) | 5,118) | 5,257) | 5,731) | 5,891) | 6,028) | |||||||
| Long-term Activity Ratio | ||||||||||||||||||||||||||||
| Equity turnover1 | 0.78 | 0.78 | 0.78 | 0.79 | 0.75 | 0.82 | 0.74 | 0.68 | 2.70 | 2.67 | 2.41 | 2.44 | 2.40 | 2.32 | 2.37 | 2.37 | 2.37 | 2.33 | — | — | — | |||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Equity Turnover, Competitors2 | ||||||||||||||||||||||||||||
| Coca-Cola Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Mondelēz International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| PepsiCo Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Philip Morris International Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q1 2017 Calculation
Equity turnover
= (Net sales, includes excise taxesQ1 2017
+ Net sales, includes excise taxesQ4 2016
+ Net sales, includes excise taxesQ3 2016
+ Net sales, includes excise taxesQ2 2016)
÷ Shareholders’ equity
= (3,931 + 4,254 + 4,330 + 4,315)
÷ 21,706 = 0.78
2 Click competitor name to see calculations.
The data reveals several key financial trends over multiple quarterly periods. Net sales, measured in millions of US dollars, demonstrate variability with notable fluctuations. Initially, net sales increased from 2,856 in March 2012 to a peak of 3,204 in June 2012, followed by some minor oscillations and a general decrease heading toward early 2015. Starting in the first quarter of 2015, net sales experienced a significant upward trend, reaching a pronounced peak of 4,381 in September 2015. After this peak, net sales stabilized somewhat but remained at elevated levels compared to earlier years, fluctuating between approximately 3,900 and 4,300 through early 2017.
Shareholders’ equity, also expressed in millions of US dollars, shows a long decline from 6,028 in March 2012 down to about 4,519 by March 2015, signaling a reduction in equity value over the three-year span. However, from mid-2015 onward, there is a stark and sustained increase in shareholders’ equity, jumping substantially to exceed 18,000 and continuing to rise steadily across subsequent quarters. This strong upward movement persists through March 2017, where equity levels surpass 21,700, indicating a significant strengthening of the company's equity base in the latter period.
Equity turnover ratios are observable from the third quarter of 2012 onwards. Initially, the ratio hovers around 2.33 to 2.70, reflecting relatively high turnover rates indicating efficient use of shareholders’ equity to generate sales. However, a dramatic and abrupt drop to values below 1.0 occurs starting in the first quarter of 2015, with ratios between 0.68 and 0.82, maintaining this lower level consistently through early 2017. This sharp reduction corresponds temporally with the substantial increase in shareholders’ equity, suggesting the rise in equity outpaced sales growth, resulting in decreased turnover ratios.
Overall, the analysis highlights a period of declining net sales and shareholders’ equity until early 2015, followed by a pronounced recovery in both metrics, particularly in shareholders' equity. The equity turnover ratio decline post-2015 suggests a shift in financial structure or operating efficiency patterns, indicating that the company’s equity base grew faster than sales during this period.
- Net Sales
- Variable with early increases, mid-period decline, and notable strong growth from 2015 onward, peaking in late 2015 and stabilizing thereafter.
- Shareholders’ Equity
- Gradual decline through 2014, followed by a sharp and sustained increase starting in 2015, more than quadrupling by 2017.
- Equity Turnover
- Stable and relatively high before 2015; marked and persistent decline after 2015, indicating equity growth outpacing net sales growth.