Stock Analysis on Net
AI Tokens
Stock Analysis on Net

Baxter International Inc. (NYSE:BAX)

This company has been moved to the archive! The financial data has not been updated since August 4, 2016.

Common-Size Income Statement

Baxter International Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
Net sales 100.00 100.00 100.00 100.00 100.00
Cost of sales -58.41 -51.07 -50.23 -48.55 -49.28
Gross margin 41.59% 48.93% 49.77% 51.45% 50.72%
Marketing and administrative expenses -31.04 -24.17 -24.12 -23.42 -22.70
Research and development expenses -6.05 -8.52 -8.17 -8.15 -6.81
Operating income 4.50% 16.24% 17.48% 19.88% 21.20%
Interest expense -1.46 -1.00 -1.02 -0.80 -0.66
Interest income 0.20 0.13 0.18 0.18 0.27
Net interest expense -1.26% -0.87% -0.84% -0.61% -0.39%
Foreign exchange 1.13 0.00 0.00 0.00 0.00
Loss on debt extinguishment -1.30 0.00 0.00 0.00 0.00
Gain on litigation settlement 0.52 0.00 0.00 0.00 0.00
Gain on sale of investments and other assets 0.38 0.00 0.00 0.00 0.00
Other 0.32 -0.74 0.06 1.09 -0.60
Other income (expense), net 1.05% -0.74% 0.06% 1.09% -0.60%
Income from continuing operations before income taxes 4.29% 14.63% 16.70% 20.36% 20.22%
Income tax expense -0.35 -2.96 -3.52 -3.97 -3.98
Income from continuing operations 3.94% 11.67% 13.19% 16.39% 16.24%
Income from discontinued operations, net of tax 5.77 3.31 0.00 0.00 0.00
Net income 9.71% 14.98% 13.19% 16.39% 16.24%
Net income attributable to noncontrolling interests 0.00 0.00 0.00 0.00 -0.23
Net income attributable to Baxter 9.71% 14.98% 13.19% 16.39% 16.01%

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).

The financial performance from 2011 to 2015 is characterized by a significant contraction in operational profitability and a steady decline in net margins from continuing operations. While overall net income was partially supported by discontinued operations in the final two years, the core business experienced substantial margin compression.

Gross Profitability and Cost Structure
A downward trend in gross margin is evident, falling from 50.72% in 2011 to 41.59% in 2015. This decline was primarily driven by a steady increase in the cost of sales, which rose from 49.28% to 58.41% of net sales over the five-year period. The most acute deterioration occurred between 2014 and 2015, where the cost of sales increased by over 7 percentage points.
Operating Expense Analysis
Operating efficiency deteriorated significantly as marketing and administrative expenses rose from 22.70% of net sales in 2011 to 31.04% in 2015. Research and development expenses remained relatively stable between 6% and 8.5% for most of the period, though a decrease to 6.05% was noted in 2015. The combination of rising cost of sales and increased administrative overhead led to a sharp collapse in operating income, which plummeted from 21.20% in 2011 to 4.50% in 2015.
Non-Operating Items and Financial Costs
Net interest expense as a percentage of net sales showed a consistent upward trend, increasing from -0.39% in 2011 to -1.26% in 2015, indicating rising borrowing costs or increased leverage relative to revenue. The year 2015 was marked by significant volatility in other income and expenses, including a foreign exchange gain of 1.13% and a loss on debt extinguishment of -1.30%.
Net Income and Discontinued Operations
Income from continuing operations experienced a severe decline, dropping from 16.24% in 2011 to 3.94% in 2015. However, the total net income attributable to the company was bolstered by contributions from discontinued operations, which added 3.31% in 2014 and 5.77% in 2015. Despite these gains from divestitures or ceased operations, the overall net income attributable to the company still declined from 16.01% in 2011 to 9.71% in 2015.

AI Ask an analyst for more

My previous chats

Add tokens

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?