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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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Operating Profit Margin since 2005
- Analysis of Debt
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Long-term Activity Ratios (Summary)
EMC Corp., long-term (investment) activity ratios
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibits a declining trend over the five-year period. Starting at 7.06 in 2011, it gradually decreases each year to 6.42 in 2015. This indicates a steady reduction in the efficiency with which the company utilizes its net fixed assets to generate sales.
- Total Asset Turnover
- The total asset turnover ratio shows a slight overall decline from 0.58 in 2011 to 0.53 in 2015. There is a noticeable drop to 0.51 in 2013, followed by mild recovery, but the ratio remains below the initial level. This suggests a modest decrease in the company's ability to generate revenue from its total asset base.
- Equity Turnover
- Equity turnover presents a gradual upward trend across the period analyzed. Beginning at 1.06 in 2011, the ratio dips to 0.97 in 2012 but then consistently increases to 1.17 by 2015. This indicates improving effectiveness in generating sales from shareholders' equity, potentially reflecting better utilization of equity financing or changes in leverage.
Net Fixed Asset Turnover
EMC Corp., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Property, plant and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Net fixed asset turnover = Revenues ÷ Property, plant and equipment, net
= ÷ =
2 Click competitor name to see calculations.
The financial data indicates several noteworthy trends over the five-year period ending December 31, 2015.
- Revenues
- There was a consistent upward trend in revenues, increasing from US$20,008 million in 2011 to US$24,704 million in 2015. This represents a growth of approximately 23.5% over the period, indicating sustained business expansion and increased market activity.
- Property, Plant, and Equipment (Net)
- The net value of property, plant, and equipment also rose steadily from US$2,833 million in 2011 to US$3,850 million in 2015. This increase of about 35.9% suggests ongoing investment in fixed assets, reflecting capital expenditure to support operational capacity and future growth.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio, which measures revenue generated per unit of fixed asset, showed a gradual decline from 7.06 in 2011 to 6.42 in 2015. This downward trend indicates that while revenues increased, the relative efficiency of fixed assets in generating sales has moderately decreased, possibly due to increased asset base outpacing revenue growth or less efficient utilization of assets.
Overall, the data reflects steady revenue growth combined with significant capital investment, although the efficiency in the use of fixed assets to generate revenue has declined slightly over the analyzed period. Monitoring asset utilization and ensuring that capital investments translate effectively into revenue growth could be areas of focus going forward.
Total Asset Turnover
EMC Corp., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Total asset turnover = Revenues ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends for the analyzed period from 2011 to 2015. Revenues consistently increased year over year, showing steady growth from 20,008 million US dollars in 2011 to 24,704 million US dollars in 2015. This upward trend indicates successful expansion or improvement in sales activities.
Total assets also experienced a significant rise throughout the period, growing from 34,268 million US dollars in 2011 to 46,612 million US dollars in 2015. This increase suggests investment growth, asset acquisition, or other forms of asset value enhancement over the years.
Contrarily, the total asset turnover ratio, a measure of efficiency in using assets to generate revenues, exhibited a general decline from 0.58 in 2011 to a low point of 0.51 in 2013. Although it recovered slightly thereafter to 0.53 in 2014 and maintained this level in 2015, it did not return to the initial 2011 level. This pattern implies that while revenues and assets have grown, the efficiency of asset utilization may have decreased, possibly due to an increase in asset base outpacing revenue growth or changes in asset composition.
- Revenues
- Consistent annual increase from 20,008 million US dollars in 2011 to 24,704 million US dollars in 2015, indicating robust top-line growth.
- Total Assets
- Substantial growth from 34,268 million US dollars in 2011 to 46,612 million US dollars in 2015, reflecting increased asset investment or acquisitions.
- Total Asset Turnover Ratio
- Declined from 0.58 in 2011 to 0.51 in 2013, followed by a partial recovery to 0.53 in 2014 and stability through 2015, suggesting a decreasing trend in asset efficiency despite rising revenues and assets.
Equity Turnover
EMC Corp., equity turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Total EMC Corporation’s shareholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Equity turnover = Revenues ÷ Total EMC Corporation’s shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several noteworthy trends over the five-year period from 2011 to 2015.
- Revenues
- Revenues consistently increased from 20,008 million US dollars in 2011 to 24,704 million US dollars in 2015, demonstrating steady growth each year. The annual revenue growth rate decelerated slightly in 2015 compared to earlier years but continued to move upward.
- Total Shareholders' Equity
- Shareholders' equity increased from 18,959 million US dollars in 2011 to a peak of 22,357 million US dollars in 2012. After that peak, it gradually declined, reaching 21,140 million US dollars by the end of 2015. This downward trend after 2012 indicates a reduction in the net asset base available to shareholders during the latter part of the period.
- Equity Turnover Ratio
- The equity turnover ratio, which measures revenue generated per unit of shareholders’ equity, initially declined from 1.06 in 2011 to 0.97 in 2012. However, it then increased each subsequent year, reaching 1.17 in 2015. This upward trend suggests improved efficiency in utilizing equity to generate revenues over time.
Overall, the data indicates consistent revenue growth alongside a fluctuating and slightly declining equity base after 2012. The improving equity turnover ratio reflects enhanced productivity of equity capital, implying better management of equity resources in generating sales. The combination of these trends suggests that while the company’s asset base narrowed somewhat, it achieved higher revenue generation efficiency during the period analyzed.