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TJX Cos. Inc. (TJX)
Analysis of Property, Plant and Equipment
High level of difficulty
Accounting Policy on Property, Plant and Equipment
For financial reporting purposes, TJX provides for depreciation and amortization of property using the straight-line method over the estimated useful lives of the assets. Buildings are depreciated over 33 years. Leasehold costs and improvements are generally amortized over their useful life or the committed lease term (typically 10 years to 15 years), whichever is shorter. Furniture, fixtures and equipment are depreciated over 3 to 10 years. Depreciation and amortization expense for property was $818.9 million in fiscal 2019, $727.2 million in fiscal 2018 and $664.5 million in fiscal 2017. TJX had no property held under capital leases during fiscal 2019, 2018, or 2017. Maintenance and repairs are charged to expense as incurred. Significant costs incurred for internally developed software are capitalized and amortized over 5 years. Upon retirement or sale, the cost of disposed assets and the related accumulated depreciation are eliminated and any gain or loss is included in income. Pre-opening costs, including rent, are expensed as incurred.
Source: 10-K (filing date: 2019-04-03).
Property, Plant and Equipment Disclosure
TJX Cos. Inc., balance sheet: property, plant and equipment
US$ in thousands
Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).
| Item | Description | The company |
|---|---|---|
| Property at cost | 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. | TJX Cos. Inc.’s property at cost increased from 2017 to 2018 and from 2018 to 2019. |
| Net property at cost | 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. | TJX Cos. Inc.’s net property at cost increased from 2017 to 2018 and from 2018 to 2019. |
Property, Plant and Equipment Ratios (Summary)
TJX Cos. Inc., Property, Plant and Equipment Ratios
Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).
| Financial 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. | TJX Cos. Inc.’s average age of depreciable property, plant and equipment deteriorated from 2017 to 2018 and from 2018 to 2019. |
| 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. | TJX Cos. Inc.’s estimated total useful life of depreciable property, plant and equipment increased from 2017 to 2018 but then declined significantly from 2018 to 2019. |
| Estimated time elapsed since purchase | The approximate age in years of a company’s fixed assets. Useful for comparison purposes. | TJX Cos. Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level. |
| Estimated remaining life | TJX Cos. Inc.’s estimated remaining life of depreciable property, plant and equipment increased from 2017 to 2018 but then declined significantly from 2018 to 2019. |
Average Age
| Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | Jan 30, 2016 | Jan 31, 2015 | Feb 1, 2014 | ||
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Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).
2019 Calculations
1 Average age = 100 × Accumulated depreciation and amortization ÷ Property at cost
= 100 × ÷ =
| Financial 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. | TJX Cos. Inc.’s average age of depreciable property, plant and equipment deteriorated from 2017 to 2018 and from 2018 to 2019. |
Estimated Total Useful Life
Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).
2019 Calculations
1 Estimated total useful life (years) = Property at cost ÷ Depreciation and amortization expense for property
= ÷ =
| Financial 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. | TJX Cos. Inc.’s estimated total useful life of depreciable property, plant and equipment increased from 2017 to 2018 but then declined significantly from 2018 to 2019. |
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).
2019 Calculations
1 Time elapsed since purchase (years) = Accumulated depreciation and amortization ÷ Depreciation and amortization expense for property
= ÷ =
| Financial ratio | Description | The company |
|---|---|---|
| Estimated time elapsed since purchase | The approximate age in years of a company’s fixed assets. Useful for comparison purposes. | TJX Cos. Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level. |
Estimated Remaining Life
Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).
2019 Calculations
1 Estimated remaining life (years) = Net property at cost ÷ Depreciation and amortization expense for property
= ÷ =
| Financial ratio | Description | The company |
|---|---|---|
| Estimated remaining life | TJX Cos. Inc.’s estimated remaining life of depreciable property, plant and equipment increased from 2017 to 2018 but then declined significantly from 2018 to 2019. |