Becton, Dickinson & Co. (NYSE:BDX)

Net Operating Profit After Taxes (NOPAT)

The NOPAT exhibited significant fluctuations over the period analyzed. Starting from 717 million USD in 2016, it increased sharply to 1300 million USD in 2017, then declined notably to 570 million USD in 2018. It recovered to 1105 million USD in 2019, followed by a moderate decrease to 991 million USD in 2020 before reaching a peak of 2155 million USD in 2021. The overall trend indicates volatility with a strong rebound in the final year.

Cost of Capital

The cost of capital showed a relatively stable yet slightly increasing trend. Beginning at 9.6% in 2016, it slightly declined to 9.22% in 2017. From 2018 onwards, the rate generally increased each year, reaching 9.84% by 2021. This indicates a gradual rise in the company's capital costs over the period.

Invested Capital

Invested capital displayed a rising trend until 2018, increasing from 22,258 million USD in 2016 to a peak of 47,282 million USD in 2018. After this peak, invested capital slightly decreased in 2019 to 45,181 million USD and remained relatively stable around that level through 2021, finishing at 45,278 million USD. This suggests an expansion phase until 2018, followed by stabilization.

Economic Profit

Economic profit was consistently negative throughout the entire period, indicating that the returns did not exceed the cost of capital. The economic losses deepened significantly from -1,419 million USD in 2016 to a low of -3,925 million USD in 2018, followed by a gradual improvement, though still negative, to -2,303 million USD in 2021. Despite fluctuations in NOPAT and invested capital, economic profit remained below zero, reflecting continued challenges in value creation relative to capital cost.

Summary

Overall, the financial data reflect a company facing volatility in operational profitability coupled with rising cost of capital. Though invested capital increased substantially until 2018 and remained stable afterwards, economic profit stayed negative, suggesting insufficient returns to cover the cost of capital. The notable rise in NOPAT in 2021 is a positive development, yet the persistent negative economic profit underscores ongoing difficulties in generating economic value over the period analyzed.

Net Income

The net income figures exhibit considerable fluctuation over the reported periods. Starting at 976 million US dollars in 2016, it increased moderately to 1100 million in 2017. However, 2018 saw a sharp decline to 311 million, representing a significant downturn. This was followed by a strong recovery in 2019, where net income rose to 1233 million. A decline occurred again in 2020, as net income dropped to 874 million. The latest figure in 2021 indicates a substantial increase to 2092 million, marking the highest value in the dataset and demonstrating a notable overall upward trend despite earlier volatility.

Net Operating Profit After Taxes (NOPAT)

NOPAT trends are somewhat aligned with net income, but they reflect less volatility. It started at 717 million US dollars in 2016 and sharply increased to 1300 million in 2017, marking a significant improvement. In 2018, NOPAT declined to 570 million, though this drop was less severe in relative terms compared to the net income decline in the same year. Subsequently, NOPAT recovered to 1105 million in 2019 and saw a slight decrease to 991 million in 2020. The year 2021 shows a dramatic increase to 2155 million, the highest point in the period, underscoring strong operational profitability improvements.

Summary Insights

Both net income and NOPAT demonstrate cyclical patterns characterized by steep declines followed by significant recoveries. The year 2018 stands out as an outlier with notably lower profitability, suggesting possible operational or market challenges during that period. The firm’s overall financial performance shows strong resilience and upward momentum by 2021, indicating effective management of costs and revenue growth leading to enhanced profitability. The 2021 figures exceeding previous highs imply robust financial health and operational efficiency.

The financial data reveals significant fluctuations in the income tax provision (benefit) over the observed periods. Initially, the income tax provision shows a negative value in 2017 (-124 million USD), indicating a benefit rather than an expense. This contrasts with the positive provisions in 2016 (97 million USD) and the substantial increase to 862 million USD in 2018. The value dips again in 2019 to a negative figure (-57 million USD), signaling another tax benefit, followed by a recovery to positive values in 2020 and 2021, reaching 111 million USD and 150 million USD, respectively. This volatility suggests variability in taxable income or tax planning strategies affecting provisions for income taxes.

Cash operating taxes also exhibit variability but with somewhat less drastic changes. The cash tax payment starts at 748 million USD in 2016, sharply decreases to 109 million USD in 2017, then peaks dramatically at 1,285 million USD in 2018. After this peak, there is a decline to 711 million USD in 2019, followed by further decreases and stabilization around 508 million USD in 2020, and a slight increase to 537 million USD in 2021. This pattern may reflect changes in operational profitability, timing differences in tax payments, or varying tax obligations year over year.

Income Tax Provision (Benefit)

Displayed considerable volatility with alternating positive and negative values, suggesting fluctuations in reported taxable income or tax expense recognition.

Peak observed in 2018, with a significant tax expense recorded.

Negative values in 2017 and 2019 suggest periods where tax benefits or credits were recognized.

The latter years (2020 and 2021) show moderate positive provisions, indicating a potential stabilization.

Cash Operating Taxes

Experienced sharp variations, with the highest cash tax paid in 2018 aligning with the peak in income tax provision.

Following the 2018 peak, the cash tax outlay declined and stabilized at a lower level by 2020 and 2021.

This may suggest shifts in operational profitability, timing issues in tax payments, or changes in tax liabilities over these years.

The financial data presented reveals notable trends in the company's capital structure and financing over the six-year period ending September 30, 2021.

Total Reported Debt & Leases

This item shows a significant increase from 2016 to 2018, rising from $11,801 million to a peak of $21,951 million in 2018. Subsequently, there is a consistent downward trend from 2018 through 2021, decreasing to $18,080 million. This decline may suggest efforts to reduce leverage or refinance obligations with lower levels of debt.

Shareholders’ Equity

Shareholders’ equity exhibits strong growth throughout the period. Starting at $7,633 million in 2016, it more than doubles by 2018 to $20,994 million, then continues increasing steadily to nearly $23,677 million by 2021. This upward trajectory indicates sustained profitability or capital infusions supporting the equity base.

Invested Capital

Invested capital reflects the combined financing through debt and equity and follows a similar pattern as debt, increasing from $22,258 million in 2016 to a peak of $47,282 million in 2018. Afterward, invested capital experiences a moderate decline, ending at $45,278 million in 2021. This suggests that while the total capital invested in the business grew substantially initially, it has somewhat plateaued or been optimized in recent years.

Overall, the data indicates an initial period of expansion or increased financing up to 2018, followed by a phase of debt reduction and stability in total invested capital. The continuous growth in shareholders’ equity through this period highlights strengthening financial resilience and potential value creation for shareholders.

Economic Profit

The economic profit figures show a consistent negative trend over the entire period from 2016 to 2021. Initially recorded at -1419 million US dollars in 2016, the economic loss deepened substantially, peaking at -3925 million US dollars in 2018. Although there was some improvement in subsequent years, economic profit remained negative, ending at -2303 million US dollars in 2021. This pattern indicates ongoing challenges in generating returns above the company's cost of capital.

Invested Capital

The invested capital exhibits a general upward trend from 2016 to 2018, rising significantly from 22,258 million US dollars to 47,282 million US dollars. After 2018, a slight reduction is noticeable, with invested capital declining to 45,278 million US dollars by 2021. Despite this decrease, the invested capital remains substantially higher than the 2016 levels, suggesting increased capital deployment over the period, followed by modest consolidation or asset optimization.

Economic Spread Ratio

The economic spread ratio remains negative throughout the years, reflecting returns below the company’s cost of capital. Starting at -6.38% in 2016, the ratio worsened to its lowest point of -8.3% in 2018, aligning with the peak economic losses observed that year. Subsequently, there is a gradual improvement noted through to 2021, where the spread ratio reaches -5.09%, indicating a reduction in the negative spread, but still reflecting insufficient returns relative to invested capital cost.

Revenues

Revenues exhibited an overall upward trend from 2016 to 2021. Starting at $12,483 million in 2016, revenues decreased slightly to $12,093 million in 2017 but then experienced significant growth in subsequent years, reaching $20,248 million by 2021. This pattern indicates a period of recovery and expansion after a modest decline in 2017, with revenues increasing by approximately 62.5% over the six-year period.

Economic Profit

Economic profit remained negative throughout the entire period under review, indicating that the company consistently incurred economic losses. The losses deepened from -$1,419 million in 2016 to a peak negative value of -$3,925 million in 2018. After 2018, economic profit losses decreased, improving to -$2,303 million by 2021. This suggests that although the company failed to generate a positive economic profit, it managed to reduce its losses in the latter years after a significant deterioration in 2018.

Economic Profit Margin

The economic profit margin followed a trend similar to that of economic profit, remaining in negative territory throughout the analyzed period. The margin worsened from -11.37% in 2016 to -24.56% in 2018, indicating that economic losses as a percentage of revenues peaked in 2018. After this point, the margin improved consistently, reaching back to -11.37% by 2021, the same level as in 2016. This reflects an improvement in profitability relative to revenues, despite the margin remaining negative.

Summary

Overall, the data indicates a company that experienced revenue growth following a dip in 2017, with revenues expanding significantly by 2021. However, despite growing revenues, economic profitability remained below zero throughout the period, indicating continued economic losses. Notably, the most substantial economic losses occurred around 2018, after which there was a clear improvement in both absolute economic profit and the economic profit margin. This suggests efforts toward improving profitability, which partially offset earlier declines but did not result in positive economic profit by the end of the period.