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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Long-term Activity Ratios (Summary)
Stryker Corp., long-term (investment) activity ratios
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| 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: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The financial data reveals several trends in asset and equity utilization ratios over the five-year period ending in 2021.
- Net fixed asset turnover
- This ratio generally declined from 6.3 in 2017 to 5.21 in 2020, indicating a reduction in the efficiency of generating sales from fixed assets. However, it improved to 6.04 in 2021, suggesting a recovery or optimization in fixed asset usage during that year.
- Net fixed asset turnover (including operating lease, right-of-use asset)
- When including operating leases and right-of-use assets, the ratio followed a similar downward trend from 6.3 in 2017 to 4.52 in 2020. A partial rebound to 5.26 in 2021 shows a comparable pattern of decreased efficiency through 2020 followed by improvement in 2021, though it remained below the initial 2017 level.
- Total asset turnover
- The total asset turnover ratio steadily decreased from 0.56 in 2017 to 0.42 in 2020, indicating a decline in the company's ability to generate revenue from its total asset base. It experienced some recovery in 2021, rising to 0.49, though this did not fully reach the ratios seen at the beginning of the period.
- Equity turnover
- Equity turnover exhibited a modest downward trend from 1.25 in 2017 to 1.1 in 2020, reflecting slightly less revenue generated per unit of equity. The ratio slightly increased to 1.15 in 2021, indicating a minor improvement but still below the initial 2017 value.
Overall, the data indicates a general decline in asset and equity turnover ratios through 2020, reflecting lower operational efficiency or asset utilization during this period. The partial recovery in 2021 suggests improvements in operational or financial management, though turnover levels generally remained below those seen in 2017. The similar trajectories of both net fixed asset turnover and net fixed asset turnover including operating leases imply asset management challenges may have been consistent across owned and leased assets.
Net Fixed Asset Turnover
Stryker Corp., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Health Care Equipment & Services | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Net fixed asset turnover = Net sales ÷ Property, plant and equipment, net
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year period from 2017 to 2021.
- Net Sales
-
Net sales demonstrate a generally increasing trend, progressing from $12,444 million in 2017 to $17,108 million in 2021. There is a consistent year-over-year growth with the exception of a slight decline in 2020 where sales decreased to $14,351 million from $14,884 million in 2019. However, sales rebounded strongly in 2021, indicating recovery and renewed growth momentum.
- Property, Plant, and Equipment, Net
-
The net value of property, plant, and equipment steadily increased throughout the period, rising from $1,975 million in 2017 to $2,833 million in 2021. This consistent increase suggests ongoing investment in fixed assets and capacity expansion over the years without any annual contractions.
- Net Fixed Asset Turnover
-
This ratio, which measures sales generated per dollar of net fixed assets, shows a declining trend from 6.3 in 2017 to 5.21 in 2020. This decrease corresponds to the relative growth rate of fixed assets outpacing that of sales, particularly noticeable after 2017. In 2021, there is a rebound to 6.04, reflecting improved efficiency or higher sales relative to asset base during the last year.
In summary, the data depicts steady growth in both sales and investment in fixed assets over the period. The dip in fixed asset turnover indicates a period where asset investments outpaced sales growth, but the improvement in the last year suggests enhanced utilization efficiency or strong sales recovery. The slight sales decline in 2020 aligns with external factors possibly impacting the market, with a subsequent recovery in 2021 supporting positive outlooks for operational performance.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Stryker Corp., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Property, plant and equipment, net | ||||||
| Operating lease right-of-use assets (recorded in Other noncurrent 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 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Health Care Equipment & Services | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 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.
- Net Sales
- Net sales exhibited a consistent upward trajectory over the five-year period. Beginning at $12,444 million in 2017, sales increased annually to $13,601 million in 2018 and $14,884 million in 2019. Despite a slight decline in 2020 to $14,351 million, sales rebounded robustly in 2021, reaching $17,108 million, the highest value recorded in the period. This overall growth highlights an expanding revenue base with a temporary setback in 2020.
- Property, Plant, and Equipment, Net
- The net value of property, plant, and equipment, including operating leases and right-of-use assets, showed a steady increase throughout the analyzed period. Starting at $1,975 million in 2017, the asset base grew each year, reaching $2,291 million in 2018 and further increasing significantly to $2,951 million in 2019. The upward trend continued into 2020 and 2021, culminating in a net value of $3,252 million. This pattern suggests ongoing capital investment and asset accumulation over the years.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio, a measure of how efficiently the company utilized its fixed assets to generate sales, demonstrated a declining trend from 2017 to 2020. The ratio decreased from 6.3 in 2017 to 5.94 in 2018, then more sharply to 5.04 in 2019 and further to 4.52 in 2020. However, in 2021, the ratio improved to 5.26. This indicates that although asset growth outpaced sales increases for several years, asset utilization efficiency began to recover in the most recent year.
Total Asset Turnover
Stryker Corp., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| Total Asset Turnover, Sector | ||||||
| Health Care Equipment & Services | ||||||
| Total Asset Turnover, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Total asset turnover = Net sales ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The analysis of the annual financial data reveals several notable trends in key metrics over the five-year period ending December 31, 2021.
- Net Sales
- Net sales demonstrated a consistent upward trajectory, increasing from $12,444 million in 2017 to $17,108 million in 2021. This represents a cumulative growth of approximately 37% over the period. Although there was a slight dip in 2020 compared to 2019, sales recovered strongly in 2021, reaching the highest sales figure recorded in the presented data.
- Total Assets
- Total assets also exhibited steady growth, rising from $22,197 million in 2017 to $34,631 million in 2021. The total asset base expanded significantly, particularly between 2018 and 2020, which could indicate investments in growth, acquisitions, or other asset accumulations supporting the business expansion. The rate of increase slowed somewhat from 2020 to 2021 but overall there was a near 56% increase over the five-year span.
- Total Asset Turnover
- Total asset turnover, which measures the efficiency of asset use to generate sales, showed a declining trend from 0.56 in 2017 to a low of 0.42 in 2020, before partially recovering to 0.49 in 2021. This pattern suggests that while sales grew, asset growth outpaced sales growth during much of the period, leading to less efficient asset utilization. The improvement in 2021 indicates some recovery in operational efficiency, albeit not to the level seen at the beginning of the period.
Overall, the data indicates growth in both sales and asset base, with fluctuations in asset utilization efficiency. The decline and partial recovery in the total asset turnover ratio merit further consideration to understand the underlying drivers, such as changes in asset composition, investment strategy, or operational shifts.
Equity Turnover
Stryker Corp., equity turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Total Stryker shareholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| Equity Turnover, Sector | ||||||
| Health Care Equipment & Services | ||||||
| Equity Turnover, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Equity turnover = Net sales ÷ Total Stryker shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales exhibit an overall upward trend from 2017 to 2021, increasing from 12,444 million US dollars to 17,108 million US dollars. There is consistent growth each year except for a slight decrease observed in 2020 where sales dropped marginally from 14,884 million to 14,351 million US dollars. The recovery in 2021 is strong, with net sales reaching the highest recorded value in the period under review.
- Total Shareholders’ Equity
- Shareholders’ equity also demonstrates a steady increase throughout the given timeframe. Equity rose from 9,966 million US dollars in 2017 to 14,877 million US dollars in 2021, suggesting a strengthening capital base. This growth is consistent and does not display any declines or volatility within the years analyzed.
- Equity Turnover
- Equity turnover, reflecting the efficiency in utilizing shareholders’ equity to generate sales, shows a slight declining trend from 1.25 in 2017 to 1.10 in 2020. In 2021, there is a moderate recovery to 1.15. The ratio indicates a reduction in efficiency over most of the period, despite the increase in net sales and equity. This might suggest that equity growth outpaced sales growth, impacting turnover.