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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- Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Sales (P/S) since 2005
- Aggregate Accruals
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Long-term Activity Ratios (Summary)
Steel Dynamics Inc., 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).
- Net Fixed Asset Turnover
- The ratio demonstrates a fluctuating trend over the observed periods. Starting at 3.56 in 2017, it increased to a peak of 4.01 in 2018, followed by a decline to 3.34 in 2019 and a more pronounced decrease to 2.34 in 2020. However, in 2021, the ratio rebounded sharply to 3.87, approaching the levels seen at the beginning of the period. This indicates variability in the efficiency of using fixed assets to generate sales, with a significant dip in 2020 possibly linked to external factors affecting asset utilization.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- The trend closely mirrors that of the standard net fixed asset turnover ratio, albeit with slightly lower values in 2019 through 2021. Beginning at 3.56 in 2017 and rising to 4.01 in 2018, it then decreases to 3.26 in 2019, dropping further to 2.29 in 2020, before recovering to 3.79 in 2021. The inclusion of operating lease and right-of-use assets appears to have a marginal impact on the turnover calculation, suggesting that these leased assets are factored in moderately to the asset base without drastically altering efficiency metrics.
- Total Asset Turnover
- This ratio shows a downward trend from 2017 through 2020, starting at 1.39 and rising slightly to 1.53 in 2018, then declining to 1.26 in 2019 and more steeply to 1.04 in 2020. In 2021, the ratio recovers to 1.47 but remains below the 2018 peak. The overall decrease through most of the period suggests a reduction in the effectiveness of the total asset base in generating revenue, with partial recovery in the final year indicating improved asset utilization.
- Equity Turnover
- This metric follows a similar pattern to the other turnover ratios, reflecting the revenue generated per unit of equity. Beginning at 2.85 in 2017 and increasing to 3.00 in 2018, it then declines to 2.57 in 2019 and further to 2.21 in 2020. In 2021, there is a notable recovery to 2.92, close to 2017 levels. This indicates variability in how efficiently the equity base is used to produce sales, with a pronounced dip in 2020 and a substantial rebound afterward.
Net Fixed Asset Turnover
Steel Dynamics Inc., 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 thousands) | ||||||
| Net sales | ||||||
| Property, plant and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Freeport-McMoRan Inc. | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Materials | ||||||
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 annual financial data reveals several notable trends regarding sales, asset investment, and operational efficiency.
- Net Sales
- Net sales showed a fluctuating pattern over the five-year period. Starting at approximately $9.5 billion in 2017, sales increased significantly to over $11.8 billion in 2018. However, 2019 and 2020 experienced declines to around $10.5 billion and $9.6 billion respectively. The company then achieved a strong recovery in 2021, with net sales surging to over $18.4 billion, nearly doubling the level of 2020. This indicates a volatile sales performance with a sharp rebound in the most recent year.
- Property, Plant and Equipment, Net
- Net property, plant, and equipment steadily increased each year, reflecting ongoing investment in fixed assets. Beginning at about $2.68 billion in 2017, this figure rose gradually to approximately $2.95 billion in 2018 and $3.14 billion in 2019. The growth accelerated from 2020 onwards, reaching $4.11 billion and $4.75 billion in 2020 and 2021 respectively. This upward trend underscores a substantial commitment to capital expenditures and asset growth, especially in the last two years.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio, which measures sales generated per dollar of net fixed assets, exhibited variability over the period. Initially, it increased from 3.56 in 2017 to a peak of 4.01 in 2018, suggesting improved efficiency in utilizing fixed assets. However, the ratio declined to 3.34 in 2019 and further dropped sharply to 2.34 in 2020, indicating reduced effectiveness in asset utilization during these years. In 2021, the ratio rebounded markedly to 3.87, nearing earlier peak levels, possibly due to the strong sales growth relative to asset base expansion.
Overall, the data reflects a cycle of investment and operational adjustments, with the company expanding its fixed asset base considerably while facing some challenges in maintaining asset use efficiency during periods of sales volatility. The strong sales growth in 2021, coupled with a recovery in asset turnover, suggests improved performance and potentially enhanced operational leverage going forward.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Steel Dynamics Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | ||||||
| Property, plant and equipment, net | ||||||
| Right-of-use assets under operating leases (included in Other assets, noncurrent) | ||||||
| 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 | ||||||
| Freeport-McMoRan Inc. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Materials | ||||||
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 general upward trend over the five-year period, increasing from approximately $9.54 billion in 2017 to about $18.41 billion in 2021. A peak was observed in 2018 at $11.82 billion, followed by a decline in 2019 and 2020, reaching approximately $9.60 billion in 2020. However, a significant rebound occurred in 2021, with net sales nearly doubling compared to the previous year, indicating strong recovery and growth momentum.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment, inclusive of operating lease and right-of-use assets, consistently increased each year. Starting from around $2.68 billion in 2017, the asset base expanded to approximately $4.85 billion by 2021. The most substantial increments occurred from 2019 onward, suggesting notable capital investment or asset acquisition during this period.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- This ratio, which measures how effectively fixed assets generate sales, showed fluctuation across the five years. Initially rising from 3.56 in 2017 to 4.01 in 2018, it then declined considerably to 3.26 in 2019 and further to 2.29 in 2020. A marked recovery was observed in 2021, with the ratio climbing back to 3.79. The decline between 2018 and 2020 may reflect the faster growth in asset base relative to sales, while the recovery in 2021 indicates improved utilization efficiency of fixed assets in generating revenue.
Total Asset Turnover
Steel Dynamics Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Freeport-McMoRan Inc. | ||||||
| Total Asset Turnover, Industry | ||||||
| Materials | ||||||
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.
- Net Sales
- The net sales displayed a general upward trajectory over the observed period, increasing significantly from approximately $9.54 billion in 2017 to $18.41 billion in 2021. The most notable jump occurred between 2020 and 2021, indicating a strong recovery or expansion following a dip in 2020. However, 2019 and 2020 reflect a decline from the peak in 2018, suggesting some volatility in revenue generation during those years.
- Total Assets
- Total assets consistently grew year over year, rising from roughly $6.86 billion in 2017 to $12.53 billion in 2021. This steady increase denotes ongoing asset accumulation or investment, potentially supporting the growth in sales and operational capacity. The growth in assets is especially pronounced between 2020 and 2021, which aligns with the significant surge observed in net sales during the same period.
- Total Asset Turnover
- The total asset turnover ratio fluctuated over the timeframe. It peaked at 1.53 in 2018, indicating high efficiency in utilizing assets to generate sales. After this peak, the ratio declined consecutively to 1.26 in 2019 and further to 1.04 in 2020, reflecting reduced asset efficiency. In 2021, the ratio rebounded to 1.47, suggesting an improvement in the company’s ability to leverage its asset base for revenue generation, almost returning to the efficiency levels seen in 2018.
- Summary
- Overall, the data depicts a company experiencing growth in both sales and assets, with some variability in the efficiency of asset utilization. The dip in sales and asset turnover ratios in 2019-2020 indicates a period of decreased performance or operational challenges, which was reversed strongly in 2021. The increases in assets and net sales in 2021, coupled with an improved asset turnover ratio, point to a recovery phase with better resource management and enhanced sales generation capabilities.
Equity Turnover
Steel Dynamics Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | ||||||
| Total Steel Dynamics, Inc. equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Freeport-McMoRan Inc. | ||||||
| Equity Turnover, Industry | ||||||
| Materials | ||||||
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 Steel Dynamics, Inc. equity
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- The net sales showed a general upward trend over the five-year period. There was a significant increase from 9,538,797 thousand US dollars in 2017 to 11,821,839 thousand in 2018. However, sales declined in 2019 and 2020, reaching a low point of 9,601,482 thousand US dollars in 2020. In 2021, net sales sharply increased to 18,408,850 thousand US dollars, marking the highest value in the observed period and indicating a strong recovery and growth.
- Total Equity
- Total equity consistently increased year over year from 3,351,574 thousand US dollars in 2017 to 6,304,641 thousand in 2021. The growth rate accelerated notably in 2021, which corresponds with the spike in net sales. This steady rise in equity suggests a strengthening of the company’s financial base and retained earnings accumulation over time.
- Equity Turnover Ratio
- The equity turnover ratio, reflecting how efficiently the company uses its equity to generate sales, displayed some fluctuations. It increased slightly from 2.85 in 2017 to 3.00 in 2018, then declined in the subsequent years to 2.57 in 2019 and 2.21 in 2020. In 2021, the ratio rebounded to 2.92. The dip between 2018 and 2020 indicates a reduced efficiency in using equity to generate sales during this period, with partial recovery in 2021 but not reaching the previous peak.