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)
McKesson Corp., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibited a noticeable decline from 113.1 in 2011 to 61.93 in 2014, indicating reduced efficiency in utilizing fixed assets to generate sales during this period. Subsequently, a partial recovery is observed, with the ratio increasing to 87.55 in 2015 before slightly decreasing again to 83.79 in 2016. Overall, this trend suggests volatility and a general downward shift compared to the initial value in 2011.
- Total Asset Turnover
- The total asset turnover ratio shows a downward trend from 3.63 in 2011, peaking marginally at 3.71 in 2012 but then declining to its lowest point of 2.66 in 2014. From 2014 onwards, there is a consistent improvement up to 3.37 by 2016. This pattern illustrates that asset utilization efficiency weakened notably up to 2014 but improved moderately in the subsequent years.
- Equity Turnover
- Equity turnover followed a generally positive trajectory with some fluctuations. Starting at 15.52 in 2011, it increased to a peak of 17.97 in 2012, slightly decreasing to 17.32 in 2013, followed by a continued decline to 16.15 in 2014. Afterwards, the ratio rose significantly, reaching 22.38 in 2015 and slightly decreasing to 21.39 in 2016. This indicates an overall enhancement in the ability to generate sales from shareholders' equity over the period, with notable improvement after 2014.
Net Fixed Asset Turnover
McKesson Corp., net fixed asset turnover calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Revenues | 190,884) | 179,045) | 137,609) | 122,455) | 122,734) | 112,084) | |
| Property, plant and equipment, net | 2,278) | 2,045) | 2,222) | 1,321) | 1,043) | 991) | |
| Long-term Activity Ratio | |||||||
| Net fixed asset turnover1 | 83.79 | 87.55 | 61.93 | 92.70 | 117.67 | 113.10 | |
| 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: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Net fixed asset turnover = Revenues ÷ Property, plant and equipment, net
= 190,884 ÷ 2,278 = 83.79
2 Click competitor name to see calculations.
- Revenues
- The revenues exhibit a consistent upward trend over the six-year period. Starting from approximately 112 billion USD in 2011, revenues increase steadily each year, reaching nearly 191 billion USD by 2016. This growth indicates a strong expansion in the company's top-line performance, with a notable acceleration between 2014 and 2015, where revenues surged from about 138 billion to 179 billion USD.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment shows an overall increasing trajectory, although it presents some fluctuations. From 991 million USD in 2011, the figure gradually rises, peaking at 2.222 billion USD in 2014. Following this peak, there is a slight decline in 2015 to 2.045 billion USD, before increasing again to 2.278 billion USD in 2016. This pattern suggests periodic investments and possible asset revaluations or disposals affecting the fixed asset base.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio declines notably from 113.1 in 2011 to 61.93 in 2014, indicating reduced efficiency in generating revenues from fixed assets. After 2014, the ratio recovers somewhat, rising to 87.55 in 2015 and slightly decreasing again to 83.79 in 2016. This trend implies that while revenues increased significantly, the growth in fixed assets outpaced revenue generation capacity during the mid-period, followed by a partial improvement in asset utilization efficiency.
- Overall Summary
- The financial data reveals that while revenues have grown substantially over the analyzed years, the company's investment in fixed assets has also increased, albeit with some volatility. The declining and then partially recovering net fixed asset turnover ratio indicates challenges in maintaining asset efficiency during periods of expanded capital investment. These insights may warrant further investigation into capital expenditure strategies and operational efficiencies.
Total Asset Turnover
McKesson Corp., total asset turnover calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Revenues | 190,884) | 179,045) | 137,609) | 122,455) | 122,734) | 112,084) | |
| Total assets | 56,563) | 53,870) | 51,759) | 34,786) | 33,093) | 30,886) | |
| Long-term Activity Ratio | |||||||
| Total asset turnover1 | 3.37 | 3.32 | 2.66 | 3.52 | 3.71 | 3.63 | |
| 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: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Total asset turnover = Revenues ÷ Total assets
= 190,884 ÷ 56,563 = 3.37
2 Click competitor name to see calculations.
The financial data exhibit a generally positive trend in revenues, total assets, and total asset turnover over the six-year period ending on March 31, 2016.
- Revenues
- Revenues increased steadily from 112,084 million US dollars in 2011 to 190,884 million US dollars in 2016. This represents a significant rise, with the most notable jump occurring between 2014 and 2015, where revenues grew from 137,609 to 179,045 million US dollars. The growth indicates strong sales performance or expansion activities.
- Total Assets
- Total assets increased consistently each year, starting at 30,886 million US dollars in 2011 and reaching 56,563 million US dollars by 2016. The data shows a particularly sharp increase from 2013 to 2014, where total assets rose from 34,786 million to 51,759 million US dollars, suggesting significant investment or acquisition activity during that period.
- Total Asset Turnover
- The total asset turnover ratio, which measures the efficiency in using assets to generate revenue, remained relatively stable but shows minor fluctuations. It started at 3.63 in 2011, peaked slightly at 3.71 in 2012, and then declined to 2.66 in 2014. Subsequently, it recovered to 3.37 by 2016. The decline in 2014 corresponds with the sharp increase in total assets that year, indicating that asset growth temporarily outpaced revenue growth. The recovery suggests improved asset utilization efficiency in the later years.
Overall, the data suggest a pattern of increasing scale in operations with investments or acquisitions leading to asset growth, accompanied by relatively efficient asset utilization, as indicated by the asset turnover ratios. The period's revenue growth is robust, supporting the view of successful expansion and operational effectiveness.
Equity Turnover
McKesson Corp., equity turnover calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Revenues | 190,884) | 179,045) | 137,609) | 122,455) | 122,734) | 112,084) | |
| Total McKesson Corporation stockholders’ equity | 8,924) | 8,001) | 8,522) | 7,070) | 6,831) | 7,220) | |
| Long-term Activity Ratio | |||||||
| Equity turnover1 | 21.39 | 22.38 | 16.15 | 17.32 | 17.97 | 15.52 | |
| 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: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 2016 Calculation
Equity turnover = Revenues ÷ Total McKesson Corporation stockholders’ equity
= 190,884 ÷ 8,924 = 21.39
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the six-year period ending March 31, 2016. Revenues exhibited a generally upward trajectory, increasing from approximately 112.1 billion to 190.9 billion US dollars, with a particularly steep rise observed between the fiscal years ending in 2014 and 2015.
In contrast, total stockholders’ equity experienced fluctuations during the same timeframe. Starting at 7.22 billion US dollars in 2011, equity decreased slightly in the following years, reaching a low point of 6.83 billion in 2012. Subsequently, it rose to 8.52 billion in 2014, then slightly declined and finally increased again to 8.92 billion in 2016. This suggests some variability in retained earnings or other components of equity during the period.
The equity turnover ratio, which measures how efficiently the company utilizes its equity to generate revenues, showed a pattern consistent with revenue growth relative to equity changes. The ratio rose from 15.52 in 2011 to a peak of 22.38 in 2015, indicating an improvement in asset utilization or operational efficiency. Although it slightly declined to 21.39 in 2016, it remained substantially higher than the levels seen in the early years.
- Revenues
- Demonstrated steady growth with a significant increase between 2014 and 2015, indicating expansion or increased sales volume.
- Total stockholders’ equity
- Displayed moderate fluctuations with no clear upward or downward trend, suggesting variability in retained earnings, dividend policy, or other equity components.
- Equity turnover ratio
- Improved notably over the period, reflecting enhanced efficiency in generating revenues from equity, peaking in 2015 before a slight decline in 2016.
Overall, the data suggest that the company has effectively increased its revenue base significantly while managing its equity with some variability. The rising equity turnover ratio indicates improved operational efficiency in leveraging equity to produce higher revenues over the years analyzed.