Sysco Corp. (NYSE:SYY)

Net Fixed Asset Turnover

The net fixed asset turnover ratio shows a fluctuating trend over the observed periods. It decreased from 13.35 in 2019 to 11.86 in 2020 and remained stable through 2021. However, it experienced a significant increase in 2022, reaching 15.4, followed by a slight increase in 2023 to 15.53, and a moderate decline to 14.34 in 2024. This indicates that after a downturn, fixed assets were utilized more efficiently starting in 2022, with a slight reduction in efficiency in the most recent year.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

When considering operating lease and right-of-use assets, the ratio also declines initially from 13.35 in 2019 to 10.45 in 2020, then continues to drop to 10.19 in 2021. It rises thereafter to 13.25 in 2022 and shows minor increases and decreases in the following years, peaking at 13.52 in 2023 before declining to 12.28 in 2024. This pattern largely parallels the net fixed asset turnover trend but at lower levels, reflecting the added asset base impact from right-of-use assets.

Total Asset Turnover

The total asset turnover ratio reveals an initial substantial decline from 3.35 in 2019 to 2.34 in 2020, followed by a marginal recovery to 2.4 in 2021. A marked improvement is observed in 2022 when the ratio rises to 3.11 and continues to climb slightly to 3.34 in 2023 before a slight decrease to 3.16 in 2024. Overall, this suggests improvements in asset utilization after 2021, though the ratio has not fully recovered to the levels seen in 2019.

Equity Turnover

The equity turnover ratio exhibits considerable variability over the period. It increased sharply from 24.02 in 2019 to 45.65 in 2020, then decreased to 33.03 in 2021. A notable rise occurred in 2022, reaching 49.66, followed by declines to 38.00 in 2023 and a slight increase to 42.39 in 2024. This volatility may indicate fluctuations in profitability or equity investment efficiency, with peaks suggesting periods of high equity utilization, and troughs reflecting reduced efficiency.

The analyzed financial data reveals several notable trends over the six-year period.

Sales

Sales demonstrated an initial decline from 60,114 million USD in 2019 to 51,298 million USD in 2021, indicating a reduction in revenue during this period. However, from 2021 onwards, sales reversed this trend and showed a strong upward trajectory, reaching 78,844 million USD by 2024. This growth in sales suggests improved market conditions or operational performance in the latter years.

Plant and Equipment at Cost, Less Accumulated Depreciation

The net value of plant and equipment exhibited a relatively stable trend from 2019 through 2022, fluctuating slightly around the 4,400 million USD mark. Beginning in 2022, there was a noticeable increase, with this value rising steadily to 5,497 million USD by 2024. This upward trend indicates ongoing investment in fixed assets or capital expenditure, which may support future operational capacity or efficiency.

Net Fixed Asset Turnover

Net fixed asset turnover, a measure of efficiency in utilizing fixed assets to generate sales, initially declined from 13.35 in 2019 to 11.86 in 2020 and remained at this level in 2021. Subsequently, the ratio increased significantly to a peak of 15.53 in 2023 before slightly declining to 14.34 in 2024. This pattern suggests that asset utilization efficiency decreased during the early years but improved markedly in the later years, reflecting better asset management or higher sales generation relative to asset base.

Overall, the period saw a dip in sales and asset efficiency initially, followed by strong recovery and growth. Increasing investment in plant and equipment aligns with improved turnover ratios, denoting enhanced operational effectiveness and expanded sales capacity in recent years.

Sales

Sales experienced a decline from 60,114 million US dollars in 2019 to 51,298 million in 2021, indicating a downward trend during this period. However, starting in 2022, sales showed a significant recovery and growth, increasing to 68,636 million and continuing to rise to 78,844 million by 2024. This marks a strong upward trend over the last three years, surpassing the initial values recorded in 2019.

Plant and Equipment at Cost, Less Accumulated Depreciation

The value of plant and equipment, including operating lease right-of-use assets, exhibited consistent growth throughout the six-year period. The amount increased from 4,502 million US dollars in 2019 to 6,420 million in 2024. This steady increase suggests ongoing investments in fixed assets or capital improvements, reflecting an expansion or upgrade of physical resources.

Net Fixed Asset Turnover

The net fixed asset turnover ratio declined from 13.35 in 2019 to a low of 10.19 in 2021, indicating diminishing efficiency in generating sales from fixed assets during these years. Subsequently, the ratio recovered to 13.52 in 2023, slightly exceeding the 2019 level before declining modestly to 12.28 in 2024. This pattern suggests an initial reduction in asset utilization efficiency, followed by improved performance, although the slight decrease in the final year may warrant further monitoring.

The financial data reveals several notable trends over the analyzed periods. Sales show a fluctuating but overall upward trajectory. Beginning with a marked decrease from 60,114 million US dollars in mid-2019 to 52,893 million US dollars in mid-2020, sales then continue to decline slightly in 2021 to 51,298 million US dollars. From 2022 onwards, a strong recovery and growth pattern emerge, with sales increasing to 68,636 million US dollars in 2022, then reaching 76,325 million US dollars in 2023, and further rising to 78,844 million US dollars in mid-2024. This indicates a rebound from a trough in 2020–2021 and sustained growth through to 2024.

Total assets have exhibited a generally increasing trend over the periods under review. Starting from 17,967 million US dollars in 2019, assets rise sharply to 22,628 million US dollars in 2020, then slightly decline to 21,414 million US dollars in 2021. Thereafter, total assets increase steadily each year, reaching 22,086 million US dollars in 2022, 22,821 million US dollars in 2023, and finally 24,917 million US dollars in mid-2024. This moderate yet consistent asset base growth may suggest ongoing investment and expansion activities.

The total asset turnover ratio, which measures efficiency in using assets to generate sales, displays some volatility. In 2019, the ratio was relatively high at 3.35. It then drops significantly to 2.34 in 2020 and holds a similar level of 2.4 in 2021, coinciding with the observed dip in sales despite asset growth. From 2022 onwards, the ratio improves notably, reaching 3.11 in 2022 and peaking near the initial level at 3.34 in 2023. A slight decline occurs in 2024 to 3.16. Overall, the trend suggests that asset utilization efficiency declined sharply during 2020 and 2021 but improved significantly alongside sales recovery in subsequent years, though it remains slightly below the 2019 peak.

In summary, the company experienced a downturn in sales and asset efficiency during 2020 and 2021, paralleling a period of asset expansion. Following this period, sales recovered robustly while total assets continued to grow moderately. The total asset turnover ratio improved, reflecting enhanced efficiency in asset use to generate revenue. The data underscores a phase of temporary operational and market challenges, followed by effective recovery and reinforcing the company's ability to capitalize on its asset base to boost sales performance.

Sales Trends

Sales demonstrate a fluctuating but generally upward trend over the analyzed periods. Initially, sales decreased from 60,114 million USD in mid-2019 to 52,893 million USD in mid-2020, then further declined slightly to 51,298 million USD by mid-2021. However, from mid-2021 onwards, there is a notable recovery and growth, with sales increasing sharply to 68,636 million USD in mid-2022, continuing to 76,325 million USD in mid-2023, and further reaching 78,844 million USD by mid-2024.

Shareholders’ Equity Trends

Shareholders’ equity shows significant volatility across the periods. It declined steeply from 2,503 million USD in mid-2019 to 1,159 million USD in mid-2020, then experienced a partial recovery to 1,553 million USD in mid-2021. Subsequently, equity decreased again somewhat to 1,382 million USD in mid-2022 but rose to 2,009 million USD by mid-2023 before falling slightly to 1,860 million USD in mid-2024. This pattern suggests fluctuating retained earnings or other equity changes impacting the equity base during the period.

Equity Turnover Ratio Trends

The equity turnover ratio exhibits substantial variation over the intervals, indicating changes in asset efficiency relative to equity. Beginning at 24.02 in mid-2019, it sharply increased to 45.65 in mid-2020, reflecting greater sales generation per unit of equity despite a lowered equity base. This ratio then declined to 33.03 in mid-2021, rose again sharply to 49.66 in mid-2022, followed by a decrease to 38.0 in mid-2023, and a modest recovery to 42.39 in mid-2024. These fluctuations imply changing operational efficiency and leverage use through the years.

Overall Insights

While sales recovery from mid-2021 onwards is strong and consistent, shareholders’ equity and equity turnover display pronounced volatility. The inverse relationship at times between equity levels and the equity turnover ratio suggests leverage effects, where lower equity levels contribute to higher turnover ratios due to sales being measured against a shrinking equity base. This could point to strategic financing decisions or operational factors affecting equity levels. The growth in sales coupled with equity fluctuations warrants close monitoring of financial leverage and capital structure moving forward.