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)
Motorola Solutions Inc., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
An analysis of investment activity ratios reveals a general trend toward improved efficiency in the utilization of fixed assets over the period from 2019 to 2023, although total asset productivity remained relatively stable.
- Fixed Asset Utilization
- A sustained upward trajectory is observed in the net fixed asset turnover ratio, which increased from 7.95 in 2019 to 10.35 by the end of 2023. This positive trend is further supported by the net fixed asset turnover ratio including right-of-use assets, which rose from 5.10 in 2019 to 6.84 in 2023. These movements indicate a growing capacity to generate higher revenue per unit of long-term physical investment.
- Overall Asset Productivity
- The total asset turnover ratio exhibited minimal fluctuation, starting at 0.74 in 2019, dipping to a low of 0.67 in 2021, and recovering to 0.75 by 2023. The relative stability of this metric, when contrasted with the significant gains in fixed asset turnover, suggests that the increase in fixed asset efficiency was offset by growth or changes in other asset categories, such as working capital or intangible assets.
- Equity Turnover Volatility
- Equity turnover showed extreme variance in the final two years of the analyzed period. A sharp spike to 78.55 was recorded in 2022, followed by a substantial decrease to 13.78 in 2023. This level of volatility suggests significant structural changes in shareholders' equity, likely driven by capital allocation activities such as large-scale share buybacks or dividends that temporarily reduced the equity base in 2022.
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Net Fixed Asset Turnover
Motorola Solutions Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 9,978) | 9,112) | 8,171) | 7,414) | 7,887) | |
| Property, plant and equipment, net | 964) | 927) | 1,042) | 1,022) | 992) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 10.35 | 9.83 | 7.84 | 7.25 | 7.95 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Apple Inc. | 8.77 | 9.36 | 9.28 | 7.47 | — | |
| Arista Networks Inc. | 57.69 | 46.11 | 37.49 | — | — | |
| Cisco Systems Inc. | 27.34 | 25.82 | 21.31 | — | — | |
| Dell Technologies Inc. | 16.48 | 18.69 | 14.65 | — | — | |
| Lumentum Holdings Inc. | 3.61 | 4.75 | 4.83 | — | — | |
| Super Micro Computer Inc. | 24.54 | 18.17 | 12.95 | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Technology Hardware & Equipment | 10.54 | 11.11 | 10.59 | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Information Technology | 3.80 | 4.46 | 4.76 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net fixed asset turnover = Net sales ÷ Property, plant and equipment, net
= 9,978 ÷ 964 = 10.35
2 Click competitor name to see calculations.
The analysis of long-term investment activity indicates a significant improvement in asset utilization efficiency over the period from 2019 to 2023. The overall trend shows a substantial increase in the company's ability to generate revenue from its fixed asset base.
- Net Sales Trends
- Revenue experienced an overall growth trajectory, increasing from 7,887 million US$ in 2019 to 9,978 million US$ in 2023. While a moderate decline was noted in 2020, the subsequent three years were characterized by consistent expansion, with the most significant growth occurring between 2021 and 2023.
- Net Property, Plant and Equipment (PPE) Dynamics
- The value of net fixed assets remained relatively stable throughout the observed period. Net PPE peaked at 1,042 million US$ in 2021 before experiencing a reduction to 927 million US$ in 2022 and a slight recovery to 964 million US$ in 2023. This suggests a strategy of maintaining or optimizing existing infrastructure rather than aggressive capital expansion.
- Net Fixed Asset Turnover Analysis
- The net fixed asset turnover ratio improved from 7.95 in 2019 to 10.35 in 2023. A pivotal shift is observed between 2021 and 2022, where the ratio rose sharply from 7.84 to 9.83. This increase was driven by the simultaneous rise in net sales and the decrease in net fixed assets. The resulting upward trend indicates a higher operational efficiency, as the company is now generating more revenue per dollar invested in property, plant, and equipment.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Motorola Solutions Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 9,978) | 9,112) | 8,171) | 7,414) | 7,887) | |
| Property, plant and equipment, net | 964) | 927) | 1,042) | 1,022) | 992) | |
| Right-of-use operating lease assets | 495) | 485) | 382) | 468) | 554) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 1,459) | 1,412) | 1,424) | 1,490) | 1,546) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 6.84 | 6.45 | 5.74 | 4.98 | 5.10 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Apple Inc. | 7.05 | 7.51 | 7.39 | 6.06 | — | |
| Arista Networks Inc. | 37.21 | 29.52 | 20.50 | — | — | |
| Cisco Systems Inc. | 18.65 | 17.19 | 14.51 | — | — | |
| Dell Technologies Inc. | 14.75 | 16.10 | 11.02 | — | — | |
| Lumentum Holdings Inc. | 3.12 | 3.95 | 4.07 | — | — | |
| Super Micro Computer Inc. | 23.02 | 16.78 | 12.07 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Technology Hardware & Equipment | 8.52 | 8.90 | 8.31 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Information Technology | 3.33 | 3.86 | 4.04 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 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)
= 9,978 ÷ 1,459 = 6.84
2 Click competitor name to see calculations.
The efficiency of fixed asset utilization has demonstrated a consistent upward trajectory between 2019 and 2023. This trend is characterized by a simultaneous increase in top-line revenue and a relative stagnation in the net value of property, plant, and equipment, including right-of-use assets, resulting in a higher rate of asset productivity.
- Net Sales Growth
- Revenue exhibited a strong overall growth pattern, rising from 7,887 million USD in 2019 to 9,978 million USD in 2023. While a slight contraction occurred in 2020, the subsequent three years showed accelerated growth, with sales increasing by approximately 26% from the 2020 low to the 2023 year-end.
- Fixed Asset Base Stability
- The net value of property, plant, and equipment, including operating lease right-of-use assets, remained relatively stable over the analyzed period. A gradual downward trend was observed from 1,546 million USD in 2019 to 1,412 million USD in 2022, followed by a minor increase to 1,459 million USD in 2023.
- Net Fixed Asset Turnover Ratio
- The turnover ratio improved steadily from 5.10 in 2019 to 6.84 in 2023. This represents a significant increase in the volume of sales generated per unit of fixed asset investment, indicating that the company is successfully scaling its revenue without requiring proportional increases in its physical infrastructure.
The diverging trends between increasing net sales and a stabilized asset base indicate an optimization of capital expenditure. The steady rise in the turnover ratio suggests that the company has enhanced its operational leverage, achieving greater output from its existing long-term investment base.
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Total Asset Turnover
Motorola Solutions Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 9,978) | 9,112) | 8,171) | 7,414) | 7,887) | |
| Total assets | 13,336) | 12,814) | 12,189) | 10,876) | 10,642) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.75 | 0.71 | 0.67 | 0.68 | 0.74 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Apple Inc. | 1.09 | 1.12 | 1.04 | 0.85 | — | |
| Arista Networks Inc. | 0.59 | 0.65 | 0.51 | — | — | |
| Cisco Systems Inc. | 0.56 | 0.55 | 0.51 | — | — | |
| Dell Technologies Inc. | 1.14 | 1.09 | 0.76 | — | — | |
| Lumentum Holdings Inc. | 0.38 | 0.41 | 0.49 | — | — | |
| Super Micro Computer Inc. | 1.94 | 1.62 | 1.59 | — | — | |
| Total Asset Turnover, Sector | ||||||
| Technology Hardware & Equipment | 0.99 | 1.01 | 0.89 | — | — | |
| Total Asset Turnover, Industry | ||||||
| Information Technology | 0.61 | 0.64 | 0.62 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Total asset turnover = Net sales ÷ Total assets
= 9,978 ÷ 13,336 = 0.75
2 Click competitor name to see calculations.
The analysis of long-term activity indicates a recovery in asset efficiency following a period of contraction. Between 2019 and 2023, a general upward trajectory in both revenue generation and asset acquisition is observed, with the asset turnover ratio exhibiting a U-shaped trend.
- Net Sales Performance
- Revenue experienced a temporary decline in 2020, falling to 7,414 million USD. This was followed by a sustained growth period, with net sales increasing annually to reach 9,978 million USD by December 31, 2023.
- Asset Base Expansion
- Total assets grew consistently throughout the five-year period, increasing from 10,642 million USD in 2019 to 13,336 million USD in 2023. This demonstrates a steady expansion of the balance sheet and investment base.
- Total Asset Turnover Analysis
- The total asset turnover ratio declined from 0.74 in 2019 to a minimum of 0.67 in 2021, indicating a phase where the growth of the asset base outpaced the growth of sales. A positive reversal is evident starting in 2022, with the ratio increasing to 0.71 and reaching 0.75 by 2023. This trend suggests an improved capacity to generate revenue from the expanded asset base, ending the period with higher operational efficiency than in 2019.
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Equity Turnover
Motorola Solutions Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 9,978) | 9,112) | 8,171) | 7,414) | 7,887) | |
| Total Motorola Solutions, Inc. stockholders’ equity (deficit) | 724) | 116) | (40) | (558) | (700) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 13.78 | 78.55 | — | — | — | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Apple Inc. | 6.17 | 7.78 | 5.80 | 4.20 | — | |
| Arista Networks Inc. | 0.81 | 0.90 | 0.74 | — | — | |
| Cisco Systems Inc. | 1.29 | 1.30 | 1.21 | — | — | |
| Dell Technologies Inc. | — | — | 38.01 | — | — | |
| Lumentum Holdings Inc. | 1.30 | 0.91 | 0.88 | — | — | |
| Super Micro Computer Inc. | 3.61 | 3.64 | 3.25 | — | — | |
| Equity Turnover, Sector | ||||||
| Technology Hardware & Equipment | 4.89 | 5.76 | 4.55 | — | — | |
| Equity Turnover, Industry | ||||||
| Information Technology | 1.54 | 1.71 | 1.77 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Equity turnover = Net sales ÷ Total Motorola Solutions, Inc. stockholders’ equity (deficit)
= 9,978 ÷ 724 = 13.78
2 Click competitor name to see calculations.
An analysis of the financial trajectory between 2019 and 2023 reveals a consistent increase in top-line revenue coupled with a significant structural correction in stockholders' equity. Net sales grew from 7,887 million USD in 2019 to 9,978 million USD in 2023, reflecting a sustained upward trend in revenue generation.
- Net Sales Performance
- Revenue demonstrates steady expansion over the analyzed period, rising from 7,414 million USD in 2020 to 9,978 million USD by the end of 2023, indicating strong market demand and sales growth.
- Equity Position Evolution
- A transition from a negative equity position to a positive one is observed. The stockholders' equity deficit improved from 700 million USD in 2019 to 40 million USD in 2021, eventually crossing into positive territory in 2022 at 116 million USD and reaching 724 million USD by December 31, 2023.
- Equity Turnover Dynamics
- The equity turnover ratio experienced a significant decrease from 78.55 in 2022 to 13.78 in 2023. This sharp decline is not indicative of operational inefficiency, but rather a result of the rapid expansion of the equity base. The extremely high ratio in 2022 was a consequence of a very small positive equity denominator relative to high net sales; as equity grew to 724 million USD in 2023, the ratio normalized.
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