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.
Long-term Activity Ratios (Summary)
ServiceNow Inc., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Net fixed asset turnover
- The net fixed asset turnover ratio initially increased from 6.85 in 2020 to a peak of 7.7 in 2021, indicating improved efficiency in generating sales from fixed assets. However, it declined steadily thereafter to 6.88 in 2022, 6.61 in 2023, and further to 6.23 in 2024, reflecting a gradual decrease in asset utilization effectiveness over the last three years.
- Net fixed asset turnover (including operating lease, right-of-use asset)
- This adjusted ratio shows a different trend, rising from 4.06 in 2020 to 4.34 in 2021, followed by a slight dip to 4.18 in 2022. It then increased again to 4.33 in 2023 and reached 4.47 in 2024. This suggests that when incorporating leased assets, the efficiency of asset use has generally improved over the period, particularly in the last two years.
- Total asset turnover
- The total asset turnover ratio remained relatively stable throughout the period, fluctuating slightly between 0.52 and 0.55. The ratio was 0.52 in 2020, increased to 0.55 in 2021, dipped marginally to 0.54 in 2022, returned to 0.52 in 2023, and rose again to 0.54 in 2024. This stability implies consistent revenue generation relative to total assets.
- Equity turnover
- The equity turnover ratio displayed a declining trend. It started at 1.59 in 2020, remained almost unchanged at 1.6 in 2021, then decreased to 1.44 in 2022, further fell to 1.18 in 2023, and reached 1.14 in 2024. This declining pattern indicates a reduced ability to generate sales from shareholders' equity over time.
Net Fixed Asset Turnover
ServiceNow Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | 10,984) | 8,971) | 7,245) | 5,896) | 4,519) | |
| Property and equipment, net | 1,763) | 1,358) | 1,053) | 766) | 660) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 6.23 | 6.61 | 6.88 | 7.70 | 6.85 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Accenture PLC | 42.66 | 41.90 | 37.12 | 30.83 | 28.68 | |
| Adobe Inc. | 11.11 | 9.56 | 9.23 | 9.44 | 8.48 | |
| Cadence Design Systems Inc. | 10.13 | 10.14 | 9.59 | 9.77 | 8.62 | |
| CrowdStrike Holdings Inc. | 4.93 | 4.55 | 5.57 | 5.24 | 3.54 | |
| Fair Isaac Corp. | 44.65 | 138.02 | 78.34 | 47.17 | 27.89 | |
| International Business Machines Corp. | 10.95 | 11.25 | 11.35 | 10.07 | 7.33 | |
| Intuit Inc. | 16.14 | 14.83 | 14.33 | 12.35 | 10.46 | |
| Microsoft Corp. | 1.81 | 2.22 | 2.66 | 2.81 | 3.24 | |
| Oracle Corp. | 2.46 | 2.93 | 4.37 | 5.74 | 6.26 | |
| Palantir Technologies Inc. | 72.29 | 46.59 | 27.55 | 49.26 | 36.99 | |
| Palo Alto Networks Inc. | 22.23 | 19.44 | 15.38 | 13.37 | 9.79 | |
| Salesforce Inc. | 9.45 | 8.47 | 9.41 | 8.64 | 7.20 | |
| Synopsys Inc. | 10.88 | 10.48 | 10.51 | 8.90 | 7.62 | |
| Workday Inc. | 5.88 | 5.17 | 4.58 | 4.44 | 3.87 | |
| Net Fixed Asset Turnover, Sector | ||||||
| Software & Services | 3.08 | 3.75 | 4.49 | 4.73 | 5.15 | |
| Net Fixed Asset Turnover, Industry | ||||||
| Information Technology | 3.47 | 3.78 | 4.44 | 4.74 | 4.57 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net fixed asset turnover = Revenues ÷ Property and equipment, net
= 10,984 ÷ 1,763 = 6.23
2 Click competitor name to see calculations.
The analysis of the provided financial data reveals several key trends over the five-year period ending in 2024.
- Revenues
- Revenues exhibited a consistent and substantial upward trajectory, increasing from 4,519 million US dollars in 2020 to 10,984 million US dollars in 2024. This represents more than a doubling of revenue within the period, indicating strong business growth and an expanding market presence.
- Property and Equipment, Net
- The net value of property and equipment also showed a steady increase, rising from 660 million US dollars in 2020 to 1,763 million US dollars in 2024. This growth in fixed assets suggests ongoing investment in infrastructure and possibly capacity expansion to support growing operational demands.
- Net Fixed Asset Turnover
- Despite the increase in both revenues and net fixed assets, the net fixed asset turnover ratio, which measures how efficiently the company uses its fixed assets to generate revenue, has experienced a gradual decline. Starting at 6.85 in 2020, the ratio rose slightly to 7.7 in 2021 but then decreased steadily to 6.23 by 2024. This decline indicates that the company's asset base is growing at a faster rate than its revenues, which may reflect diminishing efficiency in asset utilization or substantial asset investments that have not yet resulted in proportional revenue increases.
Overall, the data reflect robust revenue growth accompanied by significant capital investments. However, the decreasing fixed asset turnover ratio warrants attention as it may imply the need for improved asset management or a lag in realizing returns from recent capital expenditures.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
ServiceNow Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | 10,984) | 8,971) | 7,245) | 5,896) | 4,519) | |
| Property and equipment, net | 1,763) | 1,358) | 1,053) | 766) | 660) | |
| Operating lease right-of-use assets | 693) | 715) | 682) | 591) | 454) | |
| Property and equipment, net (including operating lease, right-of-use asset) | 2,456) | 2,073) | 1,735) | 1,357) | 1,114) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 4.47 | 4.33 | 4.18 | 4.34 | 4.06 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Accenture PLC | 15.17 | 15.38 | 13.17 | 10.48 | 9.37 | |
| Adobe Inc. | 9.70 | 8.13 | 7.61 | 7.46 | 6.42 | |
| Cadence Design Systems Inc. | 7.68 | 7.38 | 6.57 | 6.85 | 6.04 | |
| CrowdStrike Holdings Inc. | 4.57 | 4.21 | 4.97 | 4.30 | 3.54 | |
| Fair Isaac Corp. | 25.24 | 41.28 | 25.38 | 17.51 | 12.44 | |
| International Business Machines Corp. | 7.03 | 7.09 | 7.37 | 6.43 | 5.00 | |
| Intuit Inc. | 11.47 | 9.99 | 8.86 | 8.30 | 8.00 | |
| Microsoft Corp. | 1.59 | 1.93 | 2.26 | 2.37 | 2.70 | |
| Oracle Corp. | 1.84 | 2.31 | 3.21 | 4.20 | 4.74 | |
| Palantir Technologies Inc. | 11.92 | 9.65 | 7.07 | 6.21 | 4.43 | |
| Palo Alto Networks Inc. | 10.75 | 11.16 | 9.17 | 7.32 | 5.62 | |
| Salesforce Inc. | 5.76 | 4.76 | 4.65 | 3.75 | 3.16 | |
| Synopsys Inc. | 5.43 | 5.19 | 4.87 | 4.35 | 3.88 | |
| Workday Inc. | 4.77 | 4.29 | 3.75 | 3.11 | 2.96 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Software & Services | 2.54 | 3.04 | 3.50 | 3.58 | 3.82 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Information Technology | 3.05 | 3.32 | 3.85 | 4.03 | 3.87 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenues ÷ Property and equipment, net (including operating lease, right-of-use asset)
= 10,984 ÷ 2,456 = 4.47
2 Click competitor name to see calculations.
- Revenue Trends
- Revenues demonstrate a consistent upward trajectory over the five-year period. Starting at $4,519 million in 2020, revenues grew steadily each year, reaching $10,984 million by the end of 2024. This represents a strong compound growth trend, indicating successful expansion and increasing market demand.
- Property and Equipment (Net)
- The net value of property and equipment, including operating lease right-of-use assets, also shows a steady increase from $1,114 million in 2020 to $2,456 million in 2024. This suggests ongoing investments in physical and leased assets, possibly to support expanding operations and infrastructure needs.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio, which measures how efficiently the company utilizes its fixed assets to generate revenue, remains relatively stable and slightly improves over the period. Beginning at 4.06 in 2020, it fluctuates modestly but trends upward to 4.47 by 2024. This improvement indicates enhanced efficiency or effective asset management despite the growing asset base.
Total Asset Turnover
ServiceNow Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | 10,984) | 8,971) | 7,245) | 5,896) | 4,519) | |
| Total assets | 20,383) | 17,387) | 13,299) | 10,798) | 8,715) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.54 | 0.52 | 0.54 | 0.55 | 0.52 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Accenture PLC | 1.16 | 1.25 | 1.30 | 1.17 | 1.20 | |
| Adobe Inc. | 0.71 | 0.65 | 0.65 | 0.58 | 0.53 | |
| Cadence Design Systems Inc. | 0.52 | 0.72 | 0.69 | 0.68 | 0.68 | |
| CrowdStrike Holdings Inc. | 0.46 | 0.45 | 0.40 | 0.32 | 0.34 | |
| Fair Isaac Corp. | 1.00 | 0.96 | 0.96 | 0.84 | 0.81 | |
| International Business Machines Corp. | 0.46 | 0.46 | 0.48 | 0.43 | 0.47 | |
| Intuit Inc. | 0.51 | 0.52 | 0.46 | 0.62 | 0.70 | |
| Microsoft Corp. | 0.48 | 0.51 | 0.54 | 0.50 | 0.47 | |
| Oracle Corp. | 0.38 | 0.37 | 0.39 | 0.31 | 0.34 | |
| Palantir Technologies Inc. | 0.45 | 0.49 | 0.55 | 0.47 | 0.41 | |
| Palo Alto Networks Inc. | 0.40 | 0.48 | 0.45 | 0.42 | 0.38 | |
| Salesforce Inc. | 0.35 | 0.32 | 0.28 | 0.32 | 0.31 | |
| Synopsys Inc. | 0.47 | 0.57 | 0.54 | 0.48 | 0.46 | |
| Workday Inc. | 0.44 | 0.46 | 0.49 | 0.50 | 0.53 | |
| Total Asset Turnover, Sector | ||||||
| Software & Services | 0.49 | 0.51 | 0.53 | 0.49 | 0.48 | |
| Total Asset Turnover, Industry | ||||||
| Information Technology | 0.58 | 0.61 | 0.65 | 0.62 | 0.58 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Total asset turnover = Revenues ÷ Total assets
= 10,984 ÷ 20,383 = 0.54
2 Click competitor name to see calculations.
- Revenues
- The revenues demonstrated a consistent and significant growth trajectory over the presented period. Starting at 4519 million US dollars in 2020, revenues increased steadily each year to reach 10984 million US dollars in 2024. This indicates a strong positive trend in the company’s sales and market expansion efforts, with the revenue more than doubling within five years.
- Total assets
- Total assets also showed a substantial upward trend, growing from 8715 million US dollars in 2020 to 20383 million US dollars in 2024. This increase reflects ongoing investments or acquisitions, asset accumulation, or overall expansion of the company’s resource base. The asset growth appears to outpace revenue growth in absolute terms, signifying an aggressive asset build-up strategy.
- Total asset turnover
- The total asset turnover ratio, which measures efficiency in using assets to generate sales, remained relatively stable across the years. It started at 0.52 in 2020, fluctuated slightly between 0.52 and 0.55 during the period, and ended at 0.54 in 2024. This stability suggests that despite the growth in assets and revenues, the company has maintained a consistent level of asset utilization efficiency.
- Overall Insights
- The simultaneous increase in both revenues and total assets, coupled with a stable total asset turnover ratio, suggests effective management of asset resources relative to sales growth. The company expanded its asset base while still preserving asset turnover consistency, which may indicate balanced growth without compromising operational efficiency.
Equity Turnover
ServiceNow Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | 10,984) | 8,971) | 7,245) | 5,896) | 4,519) | |
| Stockholders’ equity | 9,609) | 7,628) | 5,032) | 3,695) | 2,834) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 1.14 | 1.18 | 1.44 | 1.60 | 1.59 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Accenture PLC | 2.29 | 2.50 | 2.79 | 2.59 | 2.61 | |
| Adobe Inc. | 1.52 | 1.18 | 1.25 | 1.07 | 0.97 | |
| Cadence Design Systems Inc. | 0.99 | 1.20 | 1.30 | 1.09 | 1.08 | |
| CrowdStrike Holdings Inc. | 1.33 | 1.53 | 1.42 | 1.00 | 0.65 | |
| Fair Isaac Corp. | — | — | — | — | 3.91 | |
| International Business Machines Corp. | 2.30 | 2.75 | 2.76 | 3.03 | 3.57 | |
| Intuit Inc. | 0.88 | 0.83 | 0.77 | 0.98 | 1.50 | |
| Microsoft Corp. | 0.91 | 1.03 | 1.19 | 1.18 | 1.21 | |
| Oracle Corp. | 6.08 | 46.56 | — | 7.73 | 3.24 | |
| Palantir Technologies Inc. | 0.57 | 0.64 | 0.74 | 0.67 | 0.72 | |
| Palo Alto Networks Inc. | 1.55 | 3.94 | 26.20 | 6.71 | 3.09 | |
| Salesforce Inc. | 0.58 | 0.54 | 0.46 | 0.51 | 0.50 | |
| Synopsys Inc. | 0.68 | 0.95 | 0.92 | 0.79 | 0.75 | |
| Workday Inc. | 0.90 | 1.11 | 1.13 | 1.32 | 1.46 | |
| Equity Turnover, Sector | ||||||
| Software & Services | 1.16 | 1.30 | 1.44 | 1.44 | 1.51 | |
| Equity Turnover, Industry | ||||||
| Information Technology | 1.42 | 1.57 | 1.74 | 1.80 | 1.82 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Equity turnover = Revenues ÷ Stockholders’ equity
= 10,984 ÷ 9,609 = 1.14
2 Click competitor name to see calculations.
The financial data for the analyzed periods reveals consistent growth in key metrics. Revenues have demonstrated a steady and significant upward trajectory from 2020 through 2024. Beginning at 4,519 million US dollars in 2020, revenues increased each year, reaching 10,984 million US dollars by the end of 2024. This indicates strong sales performance and expansion over the five-year period.
Stockholders’ equity also shows substantial growth during the same timeframe. Starting at 2,834 million US dollars in 2020, equity rose annually to reach 9,609 million US dollars by 2024. The increase in equity suggests that the company has been successful in retaining earnings or raising capital, thereby strengthening its financial foundation.
In contrast, the equity turnover ratio displays a declining trend from 2020 through 2024. The ratio starts at 1.59 in 2020 and gradually decreases to 1.14 by 2024. This downward trend implies that although revenues are increasing, the company is generating relatively less revenue per unit of shareholder equity over time, which may indicate a dilution effect or increased equity base that has not proportionally translated into higher revenue efficiency.
- Revenue Trend
- Consistent and substantial growth year-over-year, more than doubling from 2020 to 2024.
- Stockholders’ Equity Trend
- Strong increase indicating improved financial health and capital accumulation.
- Equity Turnover Trend
- Decreasing ratio suggesting reduced efficiency in generating revenue from equity, despite overall revenue growth.