Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
Baxter International Inc., short-term (operating) activity 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).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Baxter International Inc. inventory turnover ratio improved from 2013 to 2014 and from 2014 to 2015. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Baxter International Inc. receivables turnover ratio improved from 2013 to 2014 but then slightly deteriorated from 2014 to 2015. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Baxter International Inc. payables turnover ratio decreased from 2013 to 2014 but then increased from 2014 to 2015 exceeding 2013 level. |
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Baxter International Inc. working capital turnover ratio improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015. |
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | Baxter International Inc. number of days of inventory outstanding improved from 2013 to 2014 and from 2014 to 2015. |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Baxter International Inc. number of days of receivables outstanding improved from 2013 to 2014 but then slightly deteriorated from 2014 to 2015. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Baxter International Inc. operating cycle improved from 2013 to 2014 and from 2014 to 2015. |
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | Baxter International Inc. number of days of payables outstanding increased from 2013 to 2014 but then decreased significantly from 2014 to 2015. |
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Baxter International Inc. cash conversion cycle improved from 2013 to 2014 and from 2014 to 2015. |
Inventory Turnover
Baxter International Inc., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of sales | 5,822) | 8,514) | 7,664) | 6,889) | 6,847) | |
| Inventories | 1,604) | 3,559) | 3,499) | 2,803) | 2,628) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 3.63 | 2.39 | 2.19 | 2.46 | 2.61 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
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).
1 2015 Calculation
Inventory turnover = Cost of sales ÷ Inventories
= 5,822 ÷ 1,604 = 3.63
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Baxter International Inc. inventory turnover ratio improved from 2013 to 2014 and from 2014 to 2015. |
Receivables Turnover
Baxter International Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 9,968) | 16,671) | 15,259) | 14,190) | 13,893) | |
| Accounts and other current receivables, net | 1,731) | 2,803) | 2,911) | 2,425) | 2,420) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 5.76 | 5.95 | 5.24 | 5.85 | 5.74 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
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).
1 2015 Calculation
Receivables turnover = Net sales ÷ Accounts and other current receivables, net
= 9,968 ÷ 1,731 = 5.76
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Baxter International Inc. receivables turnover ratio improved from 2013 to 2014 but then slightly deteriorated from 2014 to 2015. |
Payables Turnover
Baxter International Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of sales | 5,822) | 8,514) | 7,664) | 6,889) | 6,847) | |
| Accounts payable, principally trade | 716) | 1,264) | 1,103) | 766) | 795) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 8.13 | 6.74 | 6.95 | 8.99 | 8.61 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
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).
1 2015 Calculation
Payables turnover = Cost of sales ÷ Accounts payable, principally trade
= 5,822 ÷ 716 = 8.13
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Baxter International Inc. payables turnover ratio decreased from 2013 to 2014 but then increased from 2014 to 2015 exceeding 2013 level. |
Working Capital Turnover
Baxter International Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 11,796) | 10,351) | 10,004) | 9,260) | 8,650) | |
| Less: Current liabilities | 5,750) | 6,042) | 5,906) | 4,759) | 4,857) | |
| Working capital | 6,046) | 4,309) | 4,098) | 4,501) | 3,793) | |
| Net sales | 9,968) | 16,671) | 15,259) | 14,190) | 13,893) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | 1.65 | 3.87 | 3.72 | 3.15 | 3.66 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
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).
1 2015 Calculation
Working capital turnover = Net sales ÷ Working capital
= 9,968 ÷ 6,046 = 1.65
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Baxter International Inc. working capital turnover ratio improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015. |
Average Inventory Processing Period
Baxter International Inc., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 3.63 | 2.39 | 2.19 | 2.46 | 2.61 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 101 | 153 | 167 | 149 | 140 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
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).
1 2015 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.63 = 101
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | Baxter International Inc. number of days of inventory outstanding improved from 2013 to 2014 and from 2014 to 2015. |
Average Receivable Collection Period
Baxter International Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 5.76 | 5.95 | 5.24 | 5.85 | 5.74 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 63 | 61 | 70 | 62 | 64 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
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).
1 2015 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 5.76 = 63
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Baxter International Inc. number of days of receivables outstanding improved from 2013 to 2014 but then slightly deteriorated from 2014 to 2015. |
Operating Cycle
Baxter International Inc., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 101 | 153 | 167 | 149 | 140 | |
| Average receivable collection period | 63 | 61 | 70 | 62 | 64 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 164 | 214 | 237 | 211 | 204 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
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).
1 2015 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 101 + 63 = 164
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Baxter International Inc. operating cycle improved from 2013 to 2014 and from 2014 to 2015. |
Average Payables Payment Period
Baxter International Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 8.13 | 6.74 | 6.95 | 8.99 | 8.61 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 45 | 54 | 53 | 41 | 42 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
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).
1 2015 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 8.13 = 45
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | Baxter International Inc. number of days of payables outstanding increased from 2013 to 2014 but then decreased significantly from 2014 to 2015. |
Cash Conversion Cycle
Baxter International Inc., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 101 | 153 | 167 | 149 | 140 | |
| Average receivable collection period | 63 | 61 | 70 | 62 | 64 | |
| Average payables payment period | 45 | 54 | 53 | 41 | 42 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 119 | 160 | 184 | 170 | 162 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
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).
1 2015 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 101 + 63 – 45 = 119
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Baxter International Inc. cash conversion cycle improved from 2013 to 2014 and from 2014 to 2015. |