Becton, Dickinson & Co. (NYSE:BDX)

The financial data indicates several notable trends over the six-year period ending in September 2021. Overall, there is a consistent reduction in leverage and debt reliance, accompanied by improved coverage ratios, suggesting enhanced financial stability and creditworthiness.

Debt to Equity

The debt to equity ratio decreased sharply from 1.51 in 2016 to 0.74 in 2021. This decline reflects a significant reduction in debt relative to shareholder equity, indicating a move towards a more conservative capital structure. Including operating lease liabilities yields very similar ratios, showing these obligations have not materially altered the debt-equity relationship.

Debt to Capital

Similarly, the debt to capital ratio fell from 0.60 in 2016 to 0.43 in 2021. This trend supports the observation of lower financial risk, as the proportion of debt in the total capital employed has diminished. Adjustments for operating lease liabilities do not substantially change this ratio, confirming stable lease-related obligations.

Debt to Assets

The ratio of debt to assets exhibited a downward trend from 0.45 in 2016 to 0.33 in 2021. This decrease suggests that the company has reduced its debt load relative to its asset base, improving its asset coverage for debt. The slight variation when including operating lease liability indicates that lease obligations are a small component of total liabilities.

Financial Leverage

Financial leverage has steadily declined from 3.35 to approximately 2.28 during the period, indicating a reduction in the use of debt to finance assets. This reflects a strengthening equity base or asset growth outpacing debt increases.

Interest Coverage

The interest coverage ratio decreased from 3.77 in 2016 to a low of 2.66 in 2018, before improving markedly to 5.78 by 2021. This improvement highlights greater earnings relative to interest expenses, underscoring enhanced ability to service debt. The initial decline may reflect temporary earnings pressures or increased interest costs during those years.

Fixed Charge Coverage

Fixed charge coverage followed a similar pattern, falling from 3.15 in 2016 to 1.92 in 2018, then rising significantly to 3.98 by 2021. This measure's recovery indicates improved capacity to meet fixed financial obligations beyond just interest, such as lease payments, reinforcing the trend of improving financial health.

In summary, the data portrays a company that has steadily deleveraged from 2016 through 2021, reducing its relative debt burden while enhancing earnings relative to fixed financial obligations. This development likely improves the company’s financial flexibility and reduces its vulnerability to interest rate changes or economic downturns.

Total Debt

The total debt increased significantly from 11,551 million USD in 2016 to a peak of 21,495 million USD in 2018. After 2018, the debt level showed a consistent downward trend, declining to 17,610 million USD by 2021. This indicates a period of increased borrowing followed by gradual deleveraging or debt repayment.

Shareholders’ Equity

Shareholders' equity experienced substantial growth over the observed period, rising from 7,633 million USD in 2016 to 23,677 million USD in 2021. Notably, there was a sharp increase between 2016 and 2018, from 7,633 million USD to 20,994 million USD, after which equity stabilized with moderate growth through 2021.

Debt to Equity Ratio

The debt to equity ratio displayed a consistent decline throughout the time frame, starting at 1.51 in 2016 and dropping to 0.74 by 2021. This trend reflects an improving financial leverage position, indicating that the company reduced its debt relative to its equity base over time, particularly after peaking in borrowing around 2018.

Total Debt (including operating lease liability)

The total debt showed a significant increase from 11,551 million USD in 2016 to a peak of 21,495 million USD in 2018. After 2018, the total debt consistently decreased, reaching 18,080 million USD by 2021. This indicates a strategic reduction in debt after 2018.

Shareholders' Equity

Shareholders' equity exhibited a strong upward trend throughout the period, rising from 7,633 million USD in 2016 to 23,677 million USD in 2021. The most notable increases occurred between 2017 and 2018, and from 2019 onwards, stabilizing at a high level by 2021. This reflects growing net assets and possibly retained earnings or capital injections.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio gradually declined over the years, moving from 1.51 in 2016 down to 0.76 in 2021. This downward trend aligns with the reduction in total debt alongside the increase in shareholders' equity, indicating an improvement in financial leverage and a stronger equity position relative to debt.

The analysis of the financial data over the six-year period reveals several key trends related to the company's debt and capital structure.

Total Debt

The total debt increased significantly from 11,551 million US dollars in 2016 to a peak of 21,495 million US dollars in 2018. Following this peak, a decline is observed, with total debt decreasing steadily to 17,610 million US dollars by 2021. This suggests a strategic reduction of debt levels after 2018.

Total Capital

Total capital demonstrated consistent growth from 19,184 million US dollars in 2016 to a peak of 42,489 million US dollars in 2018, followed by a slight decrease and stabilization around 41,000 million US dollars from 2019 to 2021. This indicates expansion in the company’s overall capital base with some stabilization in the latter years.

Debt to Capital Ratio

The debt to capital ratio declined steadily throughout the period, from 0.60 in 2016 to 0.43 in 2020 and 2021. This trend reflects an improving capital structure with decreasing reliance on debt financing relative to total capital.

Overall, the data highlights a phase of increasing leverage up to 2018, followed by a deleveraging phase and a more conservative capital structure in subsequent years. The company's efforts appear focused on reducing financial risk by lowering the proportion of debt within the capital structure, while maintaining a sizeable capital base.

Total Debt (including operating lease liability)

The total debt exhibited a notable increase from 2016 to 2018, rising from approximately $11.6 billion to nearly $21.5 billion. Subsequently, there was a decline in debt levels from 2018 through 2021, reaching about $18.1 billion by the end of the period. This trend suggests a phase of debt accumulation followed by a period of deleveraging or debt repayment.

Total Capital (including operating lease liability)

Total capital demonstrated a significant upward trend from 2016 to 2018, rising sharply from approximately $19.2 billion to $42.5 billion. Following 2018, total capital remained relatively stable with minor fluctuations, maintaining levels around the $41.7 to $42.1 billion range through 2021. This stability indicates a consolidation phase after rapid capital growth.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio decreased steadily over the analyzed period, moving from 0.6 in 2016 to 0.43 in 2021. This declining ratio reflects a gradual reduction in financial leverage, implying either effective debt management, increased equity financing, or a combination of both. The trend suggests an improvement in the company's capital structure towards lower reliance on debt.

Total debt

The total debt exhibited a significant increase from 11,551 million US dollars in 2016 to a peak of 21,495 million US dollars in 2018. Following this peak, total debt gradually decreased each year, reaching 17,610 million US dollars by 2021. This pattern indicates an initial phase of debt accumulation followed by a progressive reduction in the subsequent years.

Total assets

Total assets showed a continuous upward trend from 25,586 million US dollars in 2016 to 53,866 million US dollars in 2021. There was a marked increase in assets between 2016 and 2018, with growth slowing but remaining positive from 2018 onward. Overall, total assets nearly doubled over the six-year period.

Debt to assets ratio

The debt to assets ratio increased slightly from 0.45 in 2016 to 0.50 in 2017, reflecting the earlier surge in debt. Thereafter, a consistent downward trend in this ratio is observed, declining to 0.33 by 2020 and remaining stable at 0.33 in 2021. This indicates improved leverage and a declining reliance on debt relative to asset base over the latter part of the period.

Total Debt (Including Operating Lease Liability)

The total debt of the company experienced a significant increase from 11,551 million USD in 2016 to a peak of 21,495 million USD in 2018. Following this peak, there was a steady decline in total debt over the subsequent years, reducing to 18,080 million USD by 2021. This suggests an initial phase of increased borrowing or liabilities, followed by a deleveraging phase.

Total Assets

Total assets showed a consistent upward trend from 25,586 million USD in 2016 to 53,866 million USD in 2021. The largest increase occurred between 2016 and 2018, where assets more than doubled. After reaching a peak of 54,012 million USD in 2020, total assets slightly decreased but generally remained at elevated levels compared to earlier years.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio started at 0.45 in 2016, rose slightly to 0.5 in 2017, indicating increased leverage. From 2018 onwards, the ratio declined steadily to 0.34 by 2020 and remained stable through 2021. This trend reflects that despite fluctuations in absolute debt levels, the company's asset base grew at a faster pace relative to its debt, leading to lower leverage ratios over time.

The financial data reveals several notable trends in the company's asset base, equity position, and financial leverage over the six-year period from 2016 to 2021.

Total assets

The total assets increased substantially from 25,586 million USD in 2016 to a peak of 53,904 million USD in 2018, indicating significant expansion during this timeframe. After 2018, the asset base showed a slight decline and then relative stability, with figures around 51,765 million USD in 2019 and gradually increasing to 53,866 million USD in 2021. This suggests that the company completed rapid asset growth in the earlier years and subsequently maintained a stable asset level.

Shareholders’ equity

Shareholders’ equity demonstrated a strong upward trend throughout the period, rising from 7,633 million USD in 2016 to 23,677 million USD in 2021. The most notable increases occurred between 2016 and 2018, paralleling the asset growth. From 2018 onward, equity growth continued but at a slower pace, reflecting a strengthening capital base even as asset growth plateaued. This progression indicates enhanced financial stability and possibly consistent profitability or retained earnings accumulation.

Financial leverage

The financial leverage ratio steadily decreased from 3.35 in 2016 to 2.28 in 2021. This denotes a reduction in the reliance on debt relative to equity financing. The decline was gradual year over year, indicating a strategic move towards lowering leverage risk and potentially improving the company’s credit profile. This trend aligns with the growth in shareholders’ equity outpacing the growth of total assets, resulting in a more equity-financed asset structure.

In summary, the observed data illustrate a phase of rapid expansion in total assets and equity, followed by a period of stabilization in asset size accompanied by continued equity growth. The consistent reduction in financial leverage over the years suggests a deliberate effort to strengthen the balance sheet and reduce financial risk.

The financial data reveals several notable trends regarding earnings, interest expenses, and interest coverage over the six-year period.

Earnings before interest and tax (EBIT)

EBIT shows a generally positive trajectory with fluctuations. From 2016 to 2018, EBIT increased from 1,462 million to 1,879 million US dollars, indicating positive growth. However, there was a decline in 2019 and 2020, where EBIT decreased to 1,815 million and then sharply to 1,513 million US dollars. A significant recovery occurred in 2021 with EBIT rising markedly to 2,711 million US dollars, the highest in the observed period.

Interest Expense

Interest expense displayed a rising trend from 2016 through 2018, increasing from 388 million to 706 million US dollars. This was followed by a decline over the next three years, dropping to 639 million in 2019, 528 million in 2020, and further to 469 million US dollars in 2021. This downward trend might indicate improved debt management or refinancing efforts.

Interest Coverage Ratio

The interest coverage ratio exhibits variability over time. Initially, it declines from 3.77 in 2016 to the lowest point of 2.66 in 2018, reflecting reduced ability to cover interest expenses with operating earnings. It then stabilizes modestly around 2.84 and 2.87 in 2019 and 2020, respectively. In 2021, there is a considerable improvement to 5.78, more than doubling the previous years' ratios. This suggests enhanced earnings relative to interest obligations, improving financial stability and reduced risk.

Overall, the data indicates that while the company faced some challenges in EBIT and interest expense management through 2019 and 2020, the substantial improvement in EBIT and interest coverage ratio in 2021 points to strengthened operational profitability and better interest expense handling. This could reflect strategic adjustments or more favorable market conditions in the latest year.

Earnings Before Fixed Charges and Tax

The earnings before fixed charges and tax demonstrate a general upward trend from 2016 to 2021, starting at 1,574 million US dollars in 2016 and reaching the highest value of 2,843 million US dollars in 2021.

There was a moderate increase from 2016 through 2018, peaking at 2,028 million in 2018, followed by a slight decline in 2019 and 2020, before a significant rise in 2021.

Fixed Charges

Fixed charges varied considerably over the analyzed period, increasing from 500 million US dollars in 2016 to a peak of 1,056 million in 2018.

Following 2018, fixed charges decreased gradually to 794 million in 2020 and further to 715 million in 2021.

Fixed Charge Coverage Ratio

The fixed charge coverage ratio, which measures the ability to cover fixed charges from earnings, declined from 3.15 in 2016 to a low point of 1.92 in 2018.

Subsequent years saw incremental improvement, with the ratio rising to 2.07 in 2020 and a substantial jump to 3.98 in 2021.

This pattern indicates a weakening coverage capacity up to 2018, followed by a strengthening position through 2021.