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Baxter International Inc. pages available for free this week:
- Income Statement
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Baxter International Inc., adjustment to net income attributable to Baxter
US$ in millions
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
- Net Income Trends
- The reported net income attributable to the company exhibited fluctuations over the five-year period. It increased modestly from 2,224 million USD in 2011 to 2,326 million USD in 2012 before declining to 2,012 million USD in 2013. Subsequently, there was a rebound to 2,497 million USD in 2014. However, in 2015, a significant decline occurred, with net income decreasing sharply to 968 million USD.
- Adjusted Net Income Trends
- The adjusted net income followed a similar initial pattern to the reported net income, increasing slightly from 2,225 million USD in 2011 to 2,323 million USD in 2012, then decreasing to 2,003 million USD in 2013. It rose again to 2,531 million USD in 2014. Notably, adjusted net income diverged markedly in 2015, surging to 5,406 million USD, which contrasts sharply with the decline observed in the reported figure.
- Insights on Differences Between Reported and Adjusted Figures
- The close alignment of reported and adjusted net income from 2011 to 2014 suggests consistent financial reporting without significant one-time adjustments during this period. In 2015, however, the substantial divergence implies the presence of considerable adjustments or non-recurring items that adversely impacted reported earnings but were excluded from the adjusted results. This indicates the adjusted figures might better reflect the underlying operating performance for that year.
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Baxter International Inc., adjusted profitability ratios
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
- Net Profit Margin Trends
- The reported net profit margin displayed a fluctuating trajectory over the observed period, beginning at 16.01% in 2011 and slightly increasing to 16.39% in 2012, before declining to 13.19% in 2013. The margin showed partial recovery in 2014 to 14.98%, but then experienced a notable decline to 9.71% in 2015. In contrast, the adjusted net profit margin followed a similar pattern through 2014 but dramatically increased to 54.23% in 2015, indicating that adjustments significantly affected profitability metrics in the final year.
- Return on Equity (ROE) Patterns
- Reported ROE started at a high level of 33.77% in 2011 and remained relatively stable through 2012 at 33.53%. This was followed by a decrease to 23.77% in 2013, with a recovery to 30.75% in 2014. However, a sharp drop occurred in 2015, bringing reported ROE down to 10.94%. Adjusted ROE mirrored these trends until 2015 but then rose markedly to 61.11%, emphasizing the effect of investment adjustments on shareholder return measures during the last period.
- Return on Assets (ROA) Observations
- The reported ROA exhibited a consistent decline from 11.66% in 2011 to 11.41% in 2012, followed by a steeper drop to 7.78% in 2013. It improved modestly to 9.63% in 2014 but fell again to 4.62% in 2015. Adjusted ROA followed a consistent downward trend until 2013, showing slight improvement in 2014, and then soared to 25.77% in 2015, reflecting significant adjustments impacting asset efficiency measures.
- Summary of Insights
- Across all reported metrics, there is a visible decline in profitability and efficiency ratios by 2015, particularly in net profit margin, ROE, and ROA. The adjusted figures, however, present a contrasting picture for the final year, showing significant increases that suggest substantial non-operational or one-time adjustments influenced the financial results. These adjustments yielded notably higher profitability and return ratios in 2015, pointing to potential revaluation, restructuring outcomes, or extraordinary items affecting the investment returns and performance metrics.
Baxter International Inc., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
2015 Calculations
1 Net profit margin = 100 × Net income attributable to Baxter ÷ Net sales
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income attributable to Baxter ÷ Net sales
= 100 × ÷ =
- Reported Net Income Attributable to Baxter
- The reported net income exhibited fluctuations over the period. It increased from 2224 million US dollars in 2011 to a peak of 2497 million in 2014, followed by a significant decline to 968 million in 2015. This represents a notable drop in the final year observed.
- Adjusted Net Income Attributable to Baxter
- The adjusted net income showed a similar trend initially, rising from 2225 million in 2011 to 2531 million in 2014. However, unlike the reported figures, it sharply increased to 5406 million in 2015. This significant jump in 2015 suggests the adjustment factors had a large positive effect on the income in that year.
- Reported Net Profit Margin
- The reported net profit margin started at 16.01% in 2011, slightly increased to 16.39% in 2012, then declined to 13.19% in 2013. It recovered somewhat to 14.98% in 2014 but dropped substantially to 9.71% in 2015. This pattern indicates reduced profitability in 2015 on a reported basis.
- Adjusted Net Profit Margin
- The adjusted net profit margin mirrors the initial trend of the reported margin, moving from 16.02% in 2011 through a decline to 13.13% in 2013, then rising to 15.18% in 2014. In contrast to the reported margin, adjusted profit margin soared to 54.23% in 2015. This extraordinary spike points to exceptional adjustments that greatly enhanced perceived profitability in that year.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
2015 Calculations
1 ROE = 100 × Net income attributable to Baxter ÷ Total Baxter shareholders’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income attributable to Baxter ÷ Total Baxter shareholders’ equity
= 100 × ÷ =
- Net Income Trends
- The reported net income attributable to the company showed fluctuating performance over the five-year period. Initially, there was a moderate increase from 2224 million USD in 2011 to 2326 million USD in 2012. This was followed by a decline to 2012 million USD in 2013. Subsequently, net income improved significantly to 2497 million USD in 2014 before experiencing a sharp drop to 968 million USD in 2015.
- In contrast, the adjusted net income, which likely accounts for certain non-recurring or special items, remained relatively consistent with reported figures until 2014, showing a similar pattern of slight growth, a decline, and recovery. However, in 2015, adjusted net income dramatically increased to 5406 million USD, indicating substantial adjustments or one-time gains impacting that year’s figures.
- Return on Equity (ROE) Patterns
- The reported ROE reflected a general decline over the period, starting at a high level of 33.77% in 2011 and slightly decreasing to 33.53% in 2012. It then declined more significantly to 23.77% in 2013. An increase followed in 2014, reaching 30.75%, before dropping sharply to 10.94% in 2015. This trend suggests varying profitability relative to shareholders' equity, with a marked downturn in the final year.
- The adjusted ROE followed a similar trajectory to the reported ROE until 2014, although it showed a slightly higher value in 2014 at 31.17% compared to reported ROE. Notably, in 2015, the adjusted ROE surged to 61.11%, nearly six times the reported figure. This suggests that adjustments that year had a significant positive effect on perceived equity profitability, possibly reflecting extraordinary items or revisions enhancing the financial return when measured on an adjusted basis.
- Insights and Summary
- The overall data reveals volatility in the company’s earnings and profitability metrics with a substantial divergence emerging in 2015 between reported and adjusted figures. The typical alignment between reported and adjusted net incomes and ROEs in earlier years indicates consistency in financial performance. The significant increase in adjusted net income and ROE in 2015 suggests the presence of exceptional items or accounting adjustments that positively influenced adjusted results far beyond the reported outcomes.
- The sharp fall in reported net income and ROE in 2015 contrasts sharply with the adjusted measures, implying challenges affecting core operations or one-time adverse events captured in reported results but mitigated in adjusted figures. Such divergence warrants further investigation into the nature of these adjustments and their impact on the company’s financial health and investment evaluation.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
2015 Calculations
1 ROA = 100 × Net income attributable to Baxter ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income attributable to Baxter ÷ Total assets
= 100 × ÷ =
- Net Income Trends
- Reported net income attributable to Baxter demonstrated fluctuation over the five-year period. It peaked at 2,497 million US dollars in 2014 before significantly declining to 968 million US dollars in 2015. The adjusted net income mirrored this pattern but with a marked increase in 2015, reaching 5,406 million US dollars, more than doubling the previous year's figure.
- Return on Assets (ROA) Trends
- Reported ROA followed a decreasing trend over the period, declining from 11.66% in 2011 to 4.62% in 2015, with a notable drop between 2014 and 2015. Adjusted ROA showed a somewhat similar pattern until 2014, with values fluctuating between 11.67% and 7.74%, but then it surged sharply to 25.77% in 2015, indicating a substantial improvement in asset profitability when adjustments are considered.
- Comparative Analysis of Reported vs. Adjusted Figures
- The difference between reported and adjusted net income and ROA became particularly pronounced in 2015. While reported metrics exhibited a decline, adjusted metrics improved dramatically. This suggests that adjustments made in 2015, possibly related to non-recurring items or other financial considerations, had a significant positive impact on the company's financial indicators.
- Overall Insights
- The financial data indicates volatility in core profitability and asset efficiency metrics, with a strong divergence between reported and adjusted figures emerging in the final year. This divergence highlights the importance of examining adjusted financial measures to gain a clearer understanding of underlying operational performance.