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: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Enterprise Value to FCFF (EV/FCFF)
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
- Price to Operating Profit (P/OP) since 2005
- Analysis of Debt
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Long-term Activity Ratios (Summary)
Time Warner Inc., long-term (investment) activity ratios
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
The financial data reveals distinct trends in asset utilization and turnover ratios over the five-year period ending December 31, 2017.
- Net Fixed Asset Turnover
- This ratio demonstrates a marked improvement between 2013 and 2016, increasing from 7.79 in 2013 to a peak of 11.68 in 2016. This upward trend indicates enhanced efficiency in generating sales from net fixed assets during these years. There is a slight decline in 2017 to 11.55, suggesting a marginal reduction in efficiency but still maintaining a significantly higher level than at the beginning of the period.
- Total Asset Turnover
- The total asset turnover has remained relatively stable throughout the five years, fluctuating narrowly between 0.43 and 0.45. This consistency indicates stable overall asset utilization to generate revenue, with no significant improvements or deteriorations observed.
- Equity Turnover
- Equity turnover shows an upward trend from 1.00 in 2013 to a peak of 1.20 in 2016, reflecting increased efficiency in using shareholders’ equity to generate sales. However, this is followed by a decrease to 1.10 in 2017, indicating a slight reduction in this efficiency metric, yet maintaining an overall improvement compared to 2013.
Overall, the data suggests that there was a period of improved operational efficiency between 2013 and 2016, particularly in the utilization of fixed assets and equity. The stability in total asset turnover indicates consistent management of overall asset base, while the slight dips in the final year might warrant further monitoring.
Net Fixed Asset Turnover
Time Warner Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Net fixed asset turnover = Revenues ÷ Property, plant and equipment, net
= ÷ =
2 Click competitor name to see calculations.
- Revenues
- The revenues demonstrate an initial decline from 29,795 million US dollars in 2013 to 27,359 million US dollars in 2014. This decrease is followed by a gradual recovery, with revenues increasing to 28,118 million US dollars in 2015 and continuing this upward trend to reach 31,271 million US dollars by the end of 2017. Overall, the revenue trend displays a U-shaped pattern with an initial setback and subsequent growth, ending higher than the initial value recorded in 2013.
- Property, Plant and Equipment, Net
- There is a consistent downward trend in the net value of property, plant, and equipment between 2013 and 2016. The value declines from 3,825 million US dollars in 2013 to 2,510 million US dollars in 2016, indicating potential asset sales, depreciation, or lack of reinvestment in fixed assets. In 2017, however, there is a slight increase to 2,707 million US dollars, suggesting some reinvestment or asset acquisition after a period of decline.
- Net Fixed Asset Turnover Ratio
- This ratio shows a steady improvement over the period, starting at 7.79 in 2013 and rising to 11.55 by 2017. The increase suggests enhanced efficiency in using fixed assets to generate sales. The upward trend, peaking at 11.68 in 2016 before a marginal decrease in 2017, reflects the company's improving operational performance despite the reduction in net fixed assets during most of the analyzed period.
Total Asset Turnover
Time Warner Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Total asset turnover = Revenues ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The annual financial data indicates that revenues experienced fluctuations over the five-year period from 2013 to 2017. Starting at $29,795 million in 2013, revenues declined in 2014 to $27,359 million, followed by a moderate recovery and gradual increase each subsequent year, reaching $31,271 million in 2017.
Total assets showed a downward trend from 2013 to 2014, decreasing from $67,994 million to $63,259 million. After this decline, total assets stabilized and then increased steadily over the following years, reaching $69,209 million by the end of 2017.
The total asset turnover ratio remained relatively stable throughout the period, fluctuating marginally between 0.43 and 0.45. This stability suggests consistent efficiency in using assets to generate revenue despite the fluctuations in both revenues and total assets.
- Revenues
- Displayed a decline in 2014, followed by consistent growth from 2015 through 2017, ending higher than the initial 2013 value.
- Total Assets
- Experienced a decrease in 2014 but recovered steadily from 2015 onward, ultimately exceeding the 2013 level by 2017.
- Total Asset Turnover
- Remained stable around 0.44 throughout the period, indicating consistent operational efficiency.
Overall, the data reflects a company that encountered temporary challenges in 2014 but subsequently improved both its asset base and revenue generation capacity, maintaining stable asset utilization efficiency.
Equity Turnover
Time Warner Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Total Time Warner Inc. shareholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 2017 Calculation
Equity turnover = Revenues ÷ Total Time Warner Inc. shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The financial data over the five-year period reveals several notable trends related to revenues, shareholders' equity, and equity turnover.
- Revenues
- The revenue figures show an initial decline from US$29,795 million in 2013 to US$27,359 million in 2014. This dip is followed by a gradual recovery, with revenues increasing to US$28,118 million in 2015, US$29,318 million in 2016, and further rising to US$31,271 million in 2017. Overall, the revenues demonstrate a U-shaped trend, with an initial downturn followed by steady growth surpassing the 2013 level by the end of the period.
- Shareholders’ Equity
- The total shareholders’ equity exhibits a clear downward trend from 2013 through 2015, dropping markedly from US$29,904 million to US$23,619 million. Thereafter, equity values show a moderate recovery, increasing to US$24,335 million in 2016 and continuing upward to US$28,375 million in 2017. Despite this rebound, the equity level at the end of the period remains slightly below the 2013 figure.
- Equity Turnover
- The equity turnover ratio, which measures how efficiently equity is utilized to generate revenues, rises from a ratio of 1.00 in 2013 to 1.12 in 2014, continuing to increase to 1.19 in 2015 and peaking at 1.20 in 2016. In 2017, the ratio slightly decreases to 1.10. This overall upward movement in equity turnover during the period indicates improving efficiency in using equity to produce revenue, although this efficiency marginally declines in the final year.
In summary, the company experienced a temporary dip in revenues and shareholders’ equity around the 2014-2015 period, but both metrics showed recovery and growth towards 2017. The equity turnover ratio improved markedly over the years, indicating better capital utilization despite the fluctuations in equity levels. This suggests a period of operational improvement following initial challenges.