Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Baxter International Inc., profitability ratios (quarterly data)
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
- Gross Profit Margin
- The gross profit margin exhibited a generally declining trend over the analyzed periods. Starting at approximately 50.62% in early 2012, the margin remained relatively stable through 2013, though a slight dip was evident in the final quarter of 2013. From 2014 onward, a more consistent decline occurred, with the margin falling from around 49.36% in the first quarter of 2014 to 40.23% by mid-2016. This indicates increasing costs of goods sold relative to revenues or pricing pressures that compressed gross profitability over time.
- Operating Profit Margin
- The operating profit margin followed a downward path throughout most of the period. Beginning at 20.68% in the first quarter of 2012, marginal decreases occurred intermittently, with a notable decline beginning in late 2013. By the end of 2015, the margin had dropped sharply to 4.5%, suggesting significant increases in operational expenses or reduced operational efficiency. In the first half of 2016, operating margins showed minor improvement but remained low, around 5%, indicating ongoing operational challenges impacting profitability.
- Net Profit Margin
- The net profit margin displayed a moderate downward trend from 2012 to 2015, decreasing from roughly 16.02% in early 2012 to 9.71% at the end of 2015. However, an exceptional and abrupt increase occurred in the first half of 2016, with margins soaring to 39.42% and 47.74% respectively. This spike suggests either a one-time gain, significant tax benefits, or other extraordinary items influencing net income temporarily, as this change is out of line with prior trends.
- Return on Equity (ROE)
- Return on equity mirrored the overall profitability trend, showing a steady decline from 33.34% in the first quarter of 2012 down to 10.94% at the end of 2015. Notably, a strong rebound took place in early 2016, with ROE escalating to 43.44% and further to 56.39% by mid-2016. This fluctuation could be related to the same factors influencing net profit margins, potentially reflecting changes in leverage, extraordinary gains, or other capital structure effects.
- Return on Assets (ROA)
- Return on assets experienced a similar decrease from 11.94% in early 2012 to a low of 4.62% at the end of 2015, indicating declining efficiency in generating income from asset investments. However, a marked improvement occurred in 2016, with ROA reaching 22.58% and then 30.02%, paralleling the sharp rise in net profitability and equity returns. This suggests an improvement in asset utilization or beneficial exceptional items impacting asset returns positively.
Return on Sales
Return on Investment
Gross Profit Margin
Baxter International Inc., gross profit margin calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Gross margin | 972) | 965) | 1,072) | 1,034) | 1,021) | 1,019) | 2,224) | 2,073) | 1,969) | 1,891) | 1,954) | 1,946) | 1,939) | 1,756) | 1,905) | 1,810) | 1,872) | 1,714) | ||||||
| Net sales | 2,585) | 2,375) | 2,603) | 2,487) | 2,475) | 2,403) | 4,472) | 4,197) | 4,154) | 3,848) | 4,368) | 3,774) | 3,669) | 3,448) | 3,753) | 3,477) | 3,572) | 3,388) | ||||||
| Profitability Ratio | ||||||||||||||||||||||||
| Gross profit margin1 | 40.23% | 41.17% | 41.59% | 44.76% | 46.78% | 47.85% | 48.93% | 47.61% | 48.07% | 49.36% | 49.77% | 51.53% | 51.65% | 51.53% | 51.45% | 51.04% | 50.75% | 50.62% | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Gross Profit Margin, Competitors2 | ||||||||||||||||||||||||
| Abbott Laboratories | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Elevance Health Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Intuitive Surgical Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Medtronic PLC | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| UnitedHealth Group Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Gross profit margin = 100
× (Gross marginQ2 2016
+ Gross marginQ1 2016
+ Gross marginQ4 2015
+ Gross marginQ3 2015)
÷ (Net salesQ2 2016
+ Net salesQ1 2016
+ Net salesQ4 2015
+ Net salesQ3 2015)
= 100 × (972 + 965 + 1,072 + 1,034)
÷ (2,585 + 2,375 + 2,603 + 2,487)
= 40.23%
2 Click competitor name to see calculations.
The financial data reveals several notable trends in key performance metrics over the observed periods.
- Net Sales
- Net sales demonstrate an overall upward trend from March 2012 to December 2014, increasing from approximately 3.39 billion USD to around 4.47 billion USD. This indicates steady growth in revenue over this timeframe. However, beginning in March 2015, net sales show a marked decline and subsequent fluctuations, with values dropping to approximately 2.38 billion USD by March 2016 before slightly recovering to about 2.59 billion USD by June 2016. The decline in net sales during 2015 and 2016 may suggest challenges such as market contractions, loss of business, or other operational issues during these quarters.
- Gross Margin
- Gross margin figures generally increased through 2012 and 2013, peaking near 2.22 billion USD by December 2014. This trend aligns with the growing net sales in the same period, reflecting effective cost management or improved pricing strategies. In contrast, starting in early 2015, gross margin values nearly halved relative to the prior peak, stabilizing at lower levels around 1.0 billion USD through mid-2016. This sharp reduction signals a potential impact on profitability during the latter periods, possibly related to decreased sales volumes or increased direct costs.
- Gross Profit Margin Percentage
- The gross profit margin percentage remains relatively stable around 50-51% during the earlier periods (2012–2013). From 2014 onward, this percentage progressively declines, dropping from approximately 48.9% at the end of 2014 down to just over 40% by mid-2016. This consistent decline suggests deteriorating cost efficiency or reduced pricing power, meaning the company retains less profit per dollar of sales over time. The downward trajectory highlights a weakening margin structure, which may warrant strategic analysis of cost controls, pricing, or product mix.
In summary, the company experienced robust growth in sales and gross margin through 2012 to 2014, accompanied by solid profit margins. Starting in 2015, both revenue and gross margin experienced significant declines, alongside a continuous erosion of gross profit margin percentage. These patterns indicate emerging pressures affecting profitability and warrant focused attention to operational and market factors contributing to these changes.
Operating Profit Margin
Baxter International Inc., operating profit margin calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Operating income | 68) | 188) | 178) | 92) | 87) | 92) | 798) | 578) | 659) | 672) | 453) | 672) | 828) | 715) | 574) | 777) | 777) | 693) | ||||||
| Net sales | 2,585) | 2,375) | 2,603) | 2,487) | 2,475) | 2,403) | 4,472) | 4,197) | 4,154) | 3,848) | 4,368) | 3,774) | 3,669) | 3,448) | 3,753) | 3,477) | 3,572) | 3,388) | ||||||
| Profitability Ratio | ||||||||||||||||||||||||
| Operating profit margin1 | 5.23% | 5.48% | 4.50% | 9.03% | 11.48% | 13.97% | 16.24% | 14.26% | 15.21% | 16.76% | 17.48% | 19.05% | 20.17% | 19.95% | 19.88% | 20.47% | 20.24% | 20.68% | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Operating Profit Margin, Competitors2 | ||||||||||||||||||||||||
| Abbott Laboratories | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Elevance Health Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Intuitive Surgical Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Medtronic PLC | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| UnitedHealth Group Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Operating profit margin = 100
× (Operating incomeQ2 2016
+ Operating incomeQ1 2016
+ Operating incomeQ4 2015
+ Operating incomeQ3 2015)
÷ (Net salesQ2 2016
+ Net salesQ1 2016
+ Net salesQ4 2015
+ Net salesQ3 2015)
= 100 × (68 + 188 + 178 + 92)
÷ (2,585 + 2,375 + 2,603 + 2,487)
= 5.23%
2 Click competitor name to see calculations.
The financial data reveals several notable trends regarding operating income, net sales, and operating profit margin over the observed periods.
- Operating Income
- Operating income shows considerable volatility across the quarters. Beginning at 693 million USD in the first quarter of 2012, it rises to a peak of 828 million USD in the second quarter of 2013, followed by a general decline. Notably, it decreases sharply after 2014, reaching lows below 100 million USD across most quarters in 2015 and 2016. This suggests challenges in maintaining profitability from core operations during the later years.
- Net Sales
- Net sales generally increase over the period, starting from 3,388 million USD in early 2012 and reaching a high of 4,472 million USD by the last quarter of 2014. After this peak, net sales decrease substantially to around 2,375-2,600 million USD during 2015 and 2016, which is a notable decline relative to the previous years. The sharp drop in sales volumes coincides with the drop in operating income, indicating reduced revenue generation capacity.
- Operating Profit Margin
- The operating profit margin shows a downward trend throughout the period. Initially, margins remain relatively stable in the range of approximately 20%, dipping slightly in the latter half of 2013 and continuing to decrease more sharply from 2014 onwards. By 2015 and 2016, margins have fallen to single digits, as low as 4.5% to 5.5%, demonstrating a significant decline in operational efficiency and profitability relative to sales. The margin compression reflects increased costs, reduced pricing power, or other operational challenges.
In summary, the data illustrates a period of declining profitability and shrinking operating margins despite an initial growth in net sales. The downward trends in operating income and profit margins during the last observed years highlight a need for attention to cost management and revenue strategies to restore financial performance.
Net Profit Margin
Baxter International Inc., net profit margin calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Net income attributable to Baxter | 1,212) | 3,380) | 205) | 1) | 332) | 430) | 953) | 468) | 520) | 556) | 326) | 544) | 590) | 552) | 494) | 583) | 661) | 588) | ||||||
| Net sales | 2,585) | 2,375) | 2,603) | 2,487) | 2,475) | 2,403) | 4,472) | 4,197) | 4,154) | 3,848) | 4,368) | 3,774) | 3,669) | 3,448) | 3,753) | 3,477) | 3,572) | 3,388) | ||||||
| Profitability Ratio | ||||||||||||||||||||||||
| Net profit margin1 | 47.74% | 39.42% | 9.71% | 14.50% | 16.11% | 15.57% | 14.98% | 11.29% | 12.05% | 12.87% | 13.19% | 14.89% | 15.47% | 16.07% | 16.39% | 16.36% | 16.30% | 16.02% | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Net Profit Margin, Competitors2 | ||||||||||||||||||||||||
| Abbott Laboratories | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Elevance Health Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Intuitive Surgical Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Medtronic PLC | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| UnitedHealth Group Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
Net profit margin = 100
× (Net income attributable to BaxterQ2 2016
+ Net income attributable to BaxterQ1 2016
+ Net income attributable to BaxterQ4 2015
+ Net income attributable to BaxterQ3 2015)
÷ (Net salesQ2 2016
+ Net salesQ1 2016
+ Net salesQ4 2015
+ Net salesQ3 2015)
= 100 × (1,212 + 3,380 + 205 + 1)
÷ (2,585 + 2,375 + 2,603 + 2,487)
= 47.74%
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the observed periods. Net income attributable to the company exhibits fluctuations with a general upward tendency in the latest quarters. Net sales show a moderate upward trend with some seasonal or cyclical variations.
- Net Income Attributable
-
Net income figures demonstrate variability across quarters, with a peak occurring in the quarter ending December 31, 2015, followed by exceptionally high values in early 2016, specifically in the March and June periods. The spike in 2016, with net incomes at 3,380 million and 1,212 million respectively, markedly contrasts earlier quarters, indicating possibly extraordinary gains or non-recurring events during this timeframe.
- Net Sales
-
Net sales exhibit a generally increasing trend from 2012 through 2014, peaking in the quarter ending December 31, 2014 at 4,472 million. Post-2014, the sales stabilize around the 2,400-2,600 million range, which is lower compared to the earlier peak period. This suggests a change in business scale or reporting basis after 2014, which may need further investigation to understand the context behind the reduced sales volume.
- Net Profit Margin
-
The net profit margin shows a gradual decline from around 16% in 2012 to lower levels near 11-15% by 2014. Interestingly, in the more recent quarters of 2016, the net profit margin soars dramatically to nearly 40% and 47%, corresponding with the spikes in net income. This sharp increase likely reflects unique circumstances impacting profitability positively, such as asset sales, cost savings, or other extraordinary items.
Overall, the data suggests that while sales volumes peaked around late 2014 and then stabilized at a lower level, profitability experienced significant peaks in 2016. The net profit margin's extreme increase in 2016 relative to prior quarters implies unusual factors influencing profitability beyond normal operations. The substantial rise in net income in 2016 corroborates this. These patterns highlight the importance of examining the drivers behind the exceptional 2016 results and understanding the shift in sales trends post-2014.
Return on Equity (ROE)
Baxter International Inc., ROE calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Net income attributable to Baxter | 1,212) | 3,380) | 205) | 1) | 332) | 430) | 953) | 468) | 520) | 556) | 326) | 544) | 590) | 552) | 494) | 583) | 661) | 588) | ||||||
| Total Baxter shareholders’ equity | 8,509) | 9,019) | 8,846) | 7,824) | 7,988) | 7,258) | 8,120) | 8,404) | 8,662) | 8,671) | 8,463) | 7,749) | 7,282) | 6,961) | 6,938) | 7,129) | 6,551) | 6,725) | ||||||
| Profitability Ratio | ||||||||||||||||||||||||
| ROE1 | 56.39% | 43.44% | 10.94% | 21.93% | 27.33% | 32.67% | 30.75% | 22.25% | 22.47% | 23.25% | 23.77% | 28.13% | 30.47% | 32.90% | 33.53% | 32.19% | 34.93% | 33.34% | ||||||
| Benchmarks | ||||||||||||||||||||||||
| ROE, Competitors2 | ||||||||||||||||||||||||
| Abbott Laboratories | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Elevance Health Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Intuitive Surgical Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Medtronic PLC | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| UnitedHealth Group Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
ROE = 100
× (Net income attributable to BaxterQ2 2016
+ Net income attributable to BaxterQ1 2016
+ Net income attributable to BaxterQ4 2015
+ Net income attributable to BaxterQ3 2015)
÷ Total Baxter shareholders’ equity
= 100 × (1,212 + 3,380 + 205 + 1)
÷ 8,509 = 56.39%
2 Click competitor name to see calculations.
- Net Income Attributable to Baxter
- Over the observed period, net income exhibited fluctuations with no clear consistent upward or downward trend until late 2015 and 2016, where a significant increase is evident. Early quarters from 2012 to mid-2015 showed moderate variability around the 500 to 600 million US$ range. However, starting from the last quarter of 2015, net income surged dramatically, peaking at 3,380 million US$ in June 2016 before slightly decreasing to 1,212 million US$ in the following quarter.
- Total Baxter Shareholders' Equity
- Shareholders' equity generally increased over the timeframe, with some minor declines towards the end of 2014 and early 2015. The figure rose from approximately 6,700 million US$ at the beginning of 2012 to over 9,000 million US$ by mid-2016. The growth was steady with occasional fluctuations, reflecting a strengthening equity base.
- Return on Equity (ROE)
- ROE started at a peak above 33% in early 2012 and displayed a declining trend through 2013 and 2014, dropping to around 22%. A notable increase occurred in the last quarter of 2014, surging to over 30%, then fluctuated in 2015 before plunging to single digits by the end of that year (10.94%). Following that low point, ROE rebounded sharply in 2016, reaching an exceptional 56.39%, mirroring the significant increase in net income.
- Summary Insights
- The financial data indicates that while equity growth was relatively stable and steadily positive, net income remained moderately consistent with periodic dips until a large spike towards the end of the dataset. ROE closely follows the movements in net income, reflecting a strong return enhancement during 2016. The fluctuations in ROE and net income near the end of the period suggest extraordinary or one-time events impacting profitability. The significant rise in net income and ROE without a concomitant increase in equity implies improved efficiency or positive operational changes in the most recent periods.
Return on Assets (ROA)
Baxter International Inc., ROA calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Net income attributable to Baxter | 1,212) | 3,380) | 205) | 1) | 332) | 430) | 953) | 468) | 520) | 556) | 326) | 544) | 590) | 552) | 494) | 583) | 661) | 588) | ||||||
| Total assets | 15,982) | 17,350) | 20,975) | 20,172) | 30,015) | 24,861) | 25,917) | 25,563) | 25,629) | 25,261) | 25,869) | 25,250) | 23,751) | 20,318) | 20,390) | 19,825) | 18,446) | 18,784) | ||||||
| Profitability Ratio | ||||||||||||||||||||||||
| ROA1 | 30.02% | 22.58% | 4.62% | 8.51% | 7.27% | 9.54% | 9.63% | 7.32% | 7.59% | 7.98% | 7.78% | 8.63% | 9.34% | 11.27% | 11.41% | 11.58% | 12.40% | 11.94% | ||||||
| Benchmarks | ||||||||||||||||||||||||
| ROA, Competitors2 | ||||||||||||||||||||||||
| Abbott Laboratories | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Elevance Health Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Intuitive Surgical Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Medtronic PLC | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| UnitedHealth Group Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31).
1 Q2 2016 Calculation
ROA = 100
× (Net income attributable to BaxterQ2 2016
+ Net income attributable to BaxterQ1 2016
+ Net income attributable to BaxterQ4 2015
+ Net income attributable to BaxterQ3 2015)
÷ Total assets
= 100 × (1,212 + 3,380 + 205 + 1)
÷ 15,982 = 30.02%
2 Click competitor name to see calculations.
- Net Income Trends
- The net income attributable to the company exhibits significant fluctuations over the observed periods. Initial values from early 2012 to late 2012 range between approximately $494 million to $661 million, showing moderate volatility. Entering 2013, net income remains relatively stable but dips notably in the fourth quarter of 2013 to $326 million. Following this decline, values stabilize in 2014 but at a generally lower range compared to early 2012, fluctuating mostly between $430 million and $953 million, with a significant peak in the last quarter of 2014. The year 2015 shows higher volatility, reaching an exceptionally high level of $1,205 million in the last quarter. A pronounced spike appears in the first quarter of 2016, with net income surging to $3,380 million before dropping to $1,212 million in the following quarter. This spike could indicate an extraordinary event or non-recurring item positively impacting earnings.
- Total Assets Trends
- Total assets show a general upward trend from March 2012 through June 2015, rising from roughly $18.8 billion to a peak near $30 billion. This steady growth suggests ongoing asset acquisition or appreciation during this period. However, after June 2015, there is a marked decline in total assets, falling back to approximately $16 billion by mid-2016. This significant reduction may reflect asset disposals, write-downs, or other balance sheet restructuring activities.
- Return on Assets (ROA) Trends
- ROA percentages demonstrate a declining pattern from early 2012 through mid-2013, dropping from about 12.4% to under 8%. Despite some fluctuations, ROA remains under 10% for most of this period, indicating reduced efficiency in asset utilization to generate profits. Notably, there is a sharp reversal starting in late 2015 and extending into mid-2016, with ROA climbing dramatically to reach over 30% by June 2016. This surge coincides with the dramatic net income spike while total assets were declining, suggesting that the company significantly improved asset efficiency or benefitted from sizable gains relative to its asset base during this time.
- Overall Insights
- The data indicates a cycle of growth followed by consolidation or restructuring. Net income and ROA spikes in early 2016 suggest non-recurring gains or operational improvements. The decline in total assets post-2015 aligns with this interpretation, potentially reflecting a refocusing or streamlining of asset holdings. Caution should be exercised in interpreting the unusually high net income and ROA spikes, as these may not represent sustainable performance trends.