Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

ServiceNow Inc. (NYSE:NOW)

Analysis of Property, Plant and Equipment

Advanced level

Property, Plant and Equipment Disclosure

ServiceNow Inc., balance sheet: property, plant and equipment

US$ in thousands

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Computer equipment 974,319  680,160  493,536  326,378  222,648 
Computer software 71,688  59,511  58,303  46,413  32,132 
Leasehold and other improvements 167,697  125,299  74,721  56,232  37,095 
Furniture and fixtures 68,678  53,651  42,551  38,789  31,574 
Building —  —  6,551  7,084  6,379 
Construction in progress 9,257  6,830  10,167  5,341  2,535 
Property and equipment, gross 1,291,639  925,451  685,829  480,237  332,363 
Accumulated depreciation (631,998) (457,366) (338,613) (235,113) (150,743)
Property and equipment, net 659,641  468,085  347,216  245,124  181,620 

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28).

Item Description The company
Property and equipment, gross Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. ServiceNow Inc.’s property and equipment, gross increased from 2018 to 2019 and from 2019 to 2020.
Property and equipment, net Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. ServiceNow Inc.’s property and equipment, net increased from 2018 to 2019 and from 2019 to 2020.

Asset Age Ratios (Summary)

ServiceNow Inc., asset age ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Average age ratio 48.93% 49.42% 49.37% 48.96% 45.35%
Estimated total useful life (years) 6 6 6 5 5
Estimated age, time elapsed since purchase (years) 3 3 3 3 2
Estimated remaining life (years) 3 3 3 3 3

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28).

Asset age ratio Description The company
Average age ratio As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. ServiceNow Inc.’s average age ratio of depreciable property, plant and equipment deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. ServiceNow Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. ServiceNow Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Estimated remaining life ServiceNow Inc.’s estimated remaining life of depreciable property, plant and equipment decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Average Age

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in thousands)
Accumulated depreciation 631,998  457,366  338,613  235,113  150,743 
Property and equipment, gross 1,291,639  925,451  685,829  480,237  332,363 
Asset Age Ratio
Average age1 48.93% 49.42% 49.37% 48.96% 45.35%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28).

2020 Calculations

1 Average age = 100 × Accumulated depreciation ÷ Property and equipment, gross
= 100 × 631,998 ÷ 1,291,639 = 48.93%

Asset age ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. ServiceNow Inc.’s average age ratio of depreciable property, plant and equipment deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in thousands)
Property and equipment, gross 1,291,639  925,451  685,829  480,237  332,363 
Depreciation expense 225,000  167,900  123,000  93,200  67,800 
Asset Age Ratio (Years)
Estimated total useful life1 6 6 6 5 5

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28).

2020 Calculations

1 Estimated total useful life = Property and equipment, gross ÷ Depreciation expense
= 1,291,639 ÷ 225,000 = 6

Asset age ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. ServiceNow Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in thousands)
Accumulated depreciation 631,998  457,366  338,613  235,113  150,743 
Depreciation expense 225,000  167,900  123,000  93,200  67,800 
Asset Age Ratio (Years)
Time elapsed since purchase1 3 3 3 3 2

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28).

2020 Calculations

1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= 631,998 ÷ 225,000 = 3

Asset age ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. ServiceNow Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Estimated Remaining Life

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in thousands)
Property and equipment, net 659,641  468,085  347,216  245,124  181,620 
Depreciation expense 225,000  167,900  123,000  93,200  67,800 
Asset Age Ratio (Years)
Estimated remaining life1 3 3 3 3 3

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-28).

2020 Calculations

1 Estimated remaining life = Property and equipment, net ÷ Depreciation expense
= 659,641 ÷ 225,000 = 3

Asset age ratio Description The company
Estimated remaining life ServiceNow Inc.’s estimated remaining life of depreciable property, plant and equipment decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.