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)
Express Scripts Holding Co., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibited a steady level around 62.75 to 63.69 in the years 2013 to 2014, followed by a noticeable increase in 2015 and 2016 to approximately 78.8 and 78.74, respectively. In 2017, this ratio surged sharply to 181.51, indicating a significant improvement in the efficiency of fixed asset utilization to generate sales during that year.
- Total Asset Turnover
- The total asset turnover ratio remained relatively stable over the five-year period, fluctuating slightly around values between 1.84 and 1.94. It started at 1.94 in 2013, dipped marginally to 1.88 in 2014, then increased back to 1.94 in 2016 before settling at 1.84 in 2017. This suggests a consistent pattern in how total assets were employed to produce revenues, with no dramatic shifts.
- Equity Turnover
- Equity turnover showed an increasing trend from 4.77 in 2013 to a peak of 6.18 in 2016, indicating improving efficiency in using shareholders' equity to generate sales. However, in 2017, this ratio experienced a decline to 5.52, suggesting a reduction in equity efficiency compared to the prior year, yet still higher than the levels seen in the earlier years of the period.
Net Fixed Asset Turnover
Express Scripts Holding Co., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 100,064,600) | 100,287,500) | 101,751,800) | 100,887,100) | 104,098,800) | |
| Property and equipment, net | 551,300) | 1,273,600) | 1,291,300) | 1,584,000) | 1,658,900) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 181.51 | 78.74 | 78.80 | 63.69 | 62.75 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Net fixed asset turnover = Revenues ÷ Property and equipment, net
= 100,064,600 ÷ 551,300 = 181.51
2 Click competitor name to see calculations.
The financial data over the five-year period reveals several notable trends in revenue, property and equipment assets, and fixed asset efficiency.
- Revenues
- Revenues displayed relative stability, fluctuating slightly but remaining close to the 100 billion US dollar mark. Starting at approximately 104.1 billion in 2013, revenues decreased slightly in 2014 and 2017 to values near 100 billion. The lowest point was observed in 2017 at roughly 100.1 billion, indicating a marginal decline over the period without significant growth or contraction.
- Property and Equipment, Net
- The net value of property and equipment showed a marked downward trend. Beginning at about 1.66 billion in 2013, the asset base declined steadily each year, reaching just over half a billion in 2017. This points to substantial asset disposals, depreciation, or impairment over the time frame, thereby significantly reducing the company's investment in fixed assets.
- Net Fixed Asset Turnover
- In contrast to the declining asset base, the net fixed asset turnover ratio increased considerably. From a ratio around 62.75 in 2013, it remained relatively stable through 2016 but surged dramatically to 181.51 in 2017. This sharp rise reflects much higher revenues generated per unit of net fixed assets, suggesting improved asset utilization efficiency, possibly driven by the reduced asset base.
Overall, the data indicates that while revenue levels remained steady, the company significantly reduced its net investment in property and equipment. This reduction led to a pronounced increase in the fixed asset turnover ratio, which implies enhanced efficiency in asset utilization. However, the sharp decrease in tangible fixed assets could indicate a strategic shift towards a less asset-intensive business model or increased reliance on intangible assets or outsourcing. There is no clear evidence of revenue growth accompanying this change, implying that asset reductions did not translate into higher sales volume but improved relative asset productivity.
Total Asset Turnover
Express Scripts Holding Co., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 100,064,600) | 100,287,500) | 101,751,800) | 100,887,100) | 104,098,800) | |
| Total assets | 54,255,800) | 51,744,900) | 53,243,300) | 53,798,900) | 53,548,200) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 1.84 | 1.94 | 1.91 | 1.88 | 1.94 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Total asset turnover = Revenues ÷ Total assets
= 100,064,600 ÷ 54,255,800 = 1.84
2 Click competitor name to see calculations.
- Revenues
- The revenues exhibit a generally downward trend over the five-year period. Starting at approximately 104.1 billion US dollars at the end of 2013, revenues declined to about 100.1 billion US dollars by the end of 2017. The drop was not steep but indicates a slight contraction or stagnation in sales, particularly between 2013 and 2014, and again from 2016 to 2017.
- Total assets
- Total assets showed relative stability with minor fluctuations. The value remained close to the 53.5 billion US dollars mark at the beginning of the period, dipping slightly below 52 billion in 2016, before rising to approximately 54.3 billion by the end of 2017. This suggests cautious asset management or periodic asset adjustments within the company during this time frame.
- Total asset turnover
- The total asset turnover ratio, which measures the efficiency of asset use in generating revenue, fluctuated modestly but trended slightly downward overall. Beginning at 1.94 in 2013, the ratio fell to 1.84 by the end of 2017. This decline implies a small reduction in efficiency in utilizing assets to generate sales revenue, which could be linked to the minor decrease in revenue or the corresponding changes in asset levels.
Equity Turnover
Express Scripts Holding Co., equity turnover calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenues | 100,064,600) | 100,287,500) | 101,751,800) | 100,887,100) | 104,098,800) | |
| Total Express Scripts stockholders’ equity | 18,119,600) | 16,236,000) | 17,372,800) | 20,054,200) | 21,837,400) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 5.52 | 6.18 | 5.86 | 5.03 | 4.77 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Equity turnover = Revenues ÷ Total Express Scripts stockholders’ equity
= 100,064,600 ÷ 18,119,600 = 5.52
2 Click competitor name to see calculations.
- Revenues
- Revenues exhibited a slight decline over the five-year period. Starting at approximately 104.10 billion US dollars in 2013, revenues decreased to just over 100.06 billion US dollars by the end of 2017. The trend shows a steady decrease through 2014 to 2017, with a minor fluctuation in 2015 where revenues slightly increased compared to 2014 before continuing the downward trend.
- Total Express Scripts stockholders’ equity
- Stockholders' equity demonstrated a notable downward trend from 2013 through 2016, falling from approximately 21.84 billion US dollars to 16.24 billion US dollars. However, in 2017, equity increased to about 18.12 billion US dollars, indicating a partial recovery after four consecutive years of decline.
- Equity turnover
- The equity turnover ratio showed an upward trend from 2013 to 2016, increasing from 4.77 to 6.18, reflecting improved efficiency in generating revenues from equity. In 2017, the ratio declined to 5.52, signaling a reduction in the efficiency of equity utilization compared to the previous year, yet it remained higher than the initial years 2013 and 2014.