Becton, Dickinson & Co. (NYSE:BDX)

Developed technology

The value of developed technology remained relatively stable around 3,400 million USD in 2016 and 2017, but exhibited a significant increase in 2018, reaching approximately 13,966 million USD. From 2018 to 2021, the value showed a slight upward trend, incrementally rising to 14,399 million USD by 2021.

Customer relationships

Customer relationships maintained stable values from 2016 to 2017 at around 3,360 to 3,393 million USD, followed by a notable increase in 2018 to approximately 4,584 million USD. Subsequently, this value increased marginally over the years through 2021, reaching 4,658 million USD.

Product rights

Product rights stayed relatively constant with minor fluctuations, starting at 125 million USD in 2016, dipping slightly in the following years, and ending at 123 million USD in 2021, reflecting a stable but slightly declining trend.

Trademarks (first row)

The value associated with trademarks remained remarkably stable throughout the period, holding close to 405-409 million USD from 2016 to 2021, showing no significant change.

Patents and other

This category experienced consistent growth over the entire period, beginning at 349 million USD in 2016 and steadily increasing each year to reach 533 million USD by 2021, indicating ongoing investment or valuation growth in this asset type.

Amortized intangible assets, gross carrying amount

The gross carrying amount of amortized intangible assets showed a steep increase between 2017 and 2018, rising from 7,811 million USD to 19,475 million USD. Thereafter, it remained relatively stable with a slight upward movement until 2021, ending at 20,122 million USD.

Accumulated amortization

Accumulated amortization increased steadily in absolute value (more negative) from -1,435 million USD in 2016 to -7,385 million USD in 2021. This indicates ongoing amortization expense accumulation over the years, consistent with the increase in amortized intangible assets.

Amortized intangible assets, net

The net value of amortized intangible assets surged sharply between 2017 and 2018 from 5,824 million USD to 16,402 million USD, corresponding with the increase in gross carrying amount. After 2018, the net value declined progressively each year to 12,737 million USD by 2021, reflecting amortization impact exceeding additions or revaluations.

Acquired in-process research and development

Values for acquired in-process research and development were generally low and fluctuated with no clear trend, starting at 66 million USD in 2016, decreasing to 1 million USD in 2019, and rising slightly to 44 million USD in both 2020 and 2021.

Trademarks (second row)

This line, potentially representing a different classification or duplication, remained constant at 2 million USD throughout the period, indicating no change.

Unamortized intangible assets

The value of unamortized intangible assets was relatively low and showed a declining trend from 68 million USD in 2016 to a low of 3 million USD in 2019. It then recovered somewhat to 46 million USD in 2020 and remained stable in 2021.

Intangible assets, net

Net intangible assets mirrored the trend in amortized intangible assets, rising sharply from 5,893 million USD in 2017 to 16,441 million USD in 2018, then declining steadily each year to 12,783 million USD by 2021, suggesting a strong initial increase followed by consistent amortization.

Goodwill

Goodwill showed a general upward trend, starting at 7,419 million USD in 2016 and increasing steadily to 23,901 million USD by 2021. Notable increases occurred between 2017 and 2018, and growth continued steadily afterward.

Intangible assets and goodwill

The combined value of intangible assets and goodwill exhibited a significant jump from 13,456 million USD in 2017 to 40,041 million USD in 2018. Following this peak, the total declined gradually year-over-year to 36,684 million USD in 2021, reflecting the trends in both components with an initial large acquisition or revaluation followed by amortization and other adjustments.

The financial data reveals significant trends in the company's asset base and shareholders' equity over the six-year period ending September 30, 2021.

Total Assets

Reported total assets show a strong increasing trend from 25,586 million USD in 2016 to a peak of 53,904 million USD in 2018, followed by a slight decrease and stabilization around 54,000 million USD in the following years. In contrast, the adjusted total assets, which presumably exclude goodwill or other intangible assets, reveal a different pattern: rapid growth from 18,167 million USD in 2016 to 30,304 million USD in 2018, then a decline to 28,389 million USD in 2019, with a modest recovery to just under 30,000 million USD in 2020 and 2021. This divergence suggests that intangible assets and goodwill comprise a substantial and volatile portion of total assets.

Shareholders' Equity

The reported shareholders' equity consistently increased over the period, moving from 7,633 million USD in 2016 to 23,677 million USD in 2021. This steady growth aligns with the overall increase in reported total assets. However, the adjusted shareholders' equity figures display considerable volatility and negative values in certain years. Starting at 214 million USD in 2016, it surged to 5,385 million USD in 2017 but then turned negative, reaching -2,606 million USD in 2018 and remaining negative through 2019. Although slight improvements occurred in 2020 and 2021, the adjusted equity stayed close to zero or negative, indicating that after removing goodwill and similar adjustments, the company’s net equity position is less stable and could reflect impairments or other accounting considerations impacting intangible assets.

Overall Insights

The contrasting trends between reported and adjusted amounts highlight the material impact that intangible assets, including goodwill, have on the company’s balance sheet. While reported figures suggest growth and strengthening of the company’s financial position, the adjusted figures emphasize caution due to fluctuations and negative equity values in certain years. These patterns may necessitate further investigation into the quality and realizability of intangible assets and potential risks associated with impairment or write-downs.

The company's financial ratios over the reported years reveal notable fluctuations and distinct trends in operational efficiency, leverage, and profitability.

Total Asset Turnover

The reported total asset turnover ratio shows a declining pattern from 0.49 in 2016 to around 0.32 in 2020, with a slight recovery to 0.38 in 2021. In contrast, the adjusted total asset turnover, which accounts for goodwill, displays more variability but generally maintains higher levels than the reported figures. It starts at 0.69 in 2016, dips to 0.4 in 2017, then rises to 0.61 in 2019 before a small decrease in 2020 and a recovery to 0.68 in 2021. This suggests that when goodwill adjustments are considered, asset utilization appears more efficient and somewhat more stable over time.

Financial Leverage

Reported financial leverage declines steadily from 3.35 in 2016 to 2.28 in 2021, indicating a gradual reduction in dependency on debt or liabilities relative to equity. The adjusted financial leverage figures, however, show extreme variability and incomplete data, with very high values observed in 2016 (84.89) and 2020 (209.6) but missing values in other years. These extreme spikes suggest significant distortions or one-time adjustments in equity or liabilities when goodwill is included, complicating straightforward interpretation.

Return on Equity (ROE)

Reported ROE exhibits a decline from 12.79% in 2016 to a low of 1.48% in 2018, followed by a modest recovery to 8.84% in 2021. Adjusted ROE values, although incomplete, are markedly higher, indicating that goodwill adjustments significantly amplify the perceived return on equity. The adjusted ROE declines sharply from an exceptionally high 456.07% in 2016 to 20.43% in 2017, with missing data in the middle years, then spikes again to 602.76% in 2020. These large fluctuations likely reflect the effects of goodwill impairments or revaluations affecting equity and net income.

Return on Assets (ROA)

Reported ROA follows a downward trend from 3.81% in 2016 to 1.62% in 2020, with a recovery to 3.88% in 2021. Adjusted ROA maintains a consistently higher level across all years, ranging from 1.03% to 6.98%. The pattern is generally similar to the reported ROA but illustrates that goodwill adjustments lead to a more optimistic assessment of asset profitability, particularly notable in the increased adjusted ROA in 2021 compared to the reported figure.

Overall, the adjustments for goodwill have a pronounced impact on financial ratios, generally resulting in higher asset turnover, leverage, and profitability metrics. However, the inconsistency and extremity of some adjusted leverage and ROE values suggest caution in interpretation, as these may be influenced by significant goodwill remeasurement or impairment events. Reported figures indicate a trend of declining efficiency and profitability around 2017-2020, followed by a partial recovery in 2021, coupled with a steady decrease in financial leverage.

The analysis of the financial data over the six-year period reveals several notable trends in the company's asset base and efficiency metrics.

Total Assets

The reported total assets exhibited a significant increase from 25,586 million USD in 2016 to a peak of 53,904 million USD in 2018, followed by a slight decline and stabilization around 54,000 million USD through 2020 and 2021. In contrast, the adjusted total assets, which presumably exclude goodwill and other intangible assets, rose from 18,167 million USD in 2016 to about 30,304 million USD in 2018, and then showed a gradual decrease to 29,965 million USD by 2021. This suggests that a considerable portion of the reported asset growth may be attributed to goodwill or intangible assets, highlighting the difference between the two measures.

Total Asset Turnover

The reported total asset turnover ratio declined notably from 0.49 in 2016 to 0.30 in 2018, indicating a reduction in the efficiency of asset utilization in generating revenue during this period. From 2018 onward, this ratio remained relatively stable, fluctuating slightly between 0.32 and 0.38 up to 2021. In comparison, the adjusted total asset turnover ratio, which accounts for asset quality adjustments, decreased from 0.69 in 2016 to 0.40 in 2017 but then exhibited a general improving trend, rising to 0.68 by 2021. This improvement after 2017 indicates better operational efficiency when intangible assets are excluded, suggesting the underlying business assets are being utilized more effectively in recent years.

Insights

The divergence between reported and adjusted figures demonstrates the impact of goodwill and intangible assets on the company’s financial position and performance metrics. While reported assets nearly doubled between 2016 and 2018, the adjusted assets showed a less pronounced increase, implying significant acquisitions or intangible asset capitalization. The asset turnover ratios’ contrasting trends suggest that efficiency better reflects the adjusted asset base, with improvements in recent years. Overall, this analysis points to a period of growth through acquisitions or capitalized intangibles followed by efforts to improve operational efficiency relative to the tangible asset base.

The data indicates significant changes in both reported and goodwill-adjusted financial metrics over the six-year period ending September 30, 2021.

Total Assets

Reported total assets showed a strong upward trend from 25,586 million USD in 2016 to a peak of 53,904 million USD in 2018, followed by small fluctuations around 54,000 million USD thereafter. In contrast, adjusted total assets also increased sharply from 18,167 million USD in 2016 to approximately 30,304 million USD in 2018 but then slightly declined and stabilized near 30,000 million USD through to 2021. This divergence suggests adjustments, possibly for goodwill, significantly reduce asset base comparisons over time.

Shareholders’ Equity

Reported shareholders’ equity rose consistently, nearly tripling from 7,633 million USD in 2016 to 23,765 million USD in 2020, with a slight decrease to 23,677 million USD in 2021. However, adjusted shareholders’ equity exhibits substantial volatility and generally negative values after 2017, indicating that goodwill adjustments heavily impact reported net equity and may create disparities in equity evaluation. The sharp negative values in 2018 and 2019 particularly stand out.

Financial Leverage

The reported financial leverage ratio declined steadily from 3.35 in 2016 to about 2.28 by 2021, implying a reduction in reliance on debt relative to equity or an improved capital structure. Conversely, the adjusted financial leverage ratio exhibits extreme fluctuations, with an extraordinary high of 84.89 in 2016, dropping to 5.6 in 2017, disappearing in some years, then skyrocketing to 209.6 in 2020. This inconsistency likely reflects volatility in the adjusted shareholders’ equity denominator due to goodwill changes or impairments, limiting the comparability and stability of leverage metrics after adjustment.

Overall, the reported figures demonstrate consistent asset growth, increasing equity, and deleveraging over the period. The adjusted figures, after removing goodwill effects, reveal more volatile and sometimes negative shareholders’ equity and highly unstable financial leverage. This denotes that goodwill materially influences reported financial position and capital structure assessments, underscoring the importance of considering both reported and adjusted metrics when evaluating financial health and leverage.

The financial data over the six-year period reveals notable fluctuations and trends in the shareholders' equity and return on equity (ROE) metrics.

Reported Shareholders’ Equity

This metric exhibits a consistent upward trend from 2016 through 2020, increasing from US$7,633 million to US$23,765 million. However, in 2021, a slight decline is observed, with equity decreasing to US$23,677 million. The steady growth from 2016 to 2020 indicates a strengthening equity base, which may reflect retained earnings accumulation or capital infusion.

Adjusted Shareholders’ Equity

The adjusted shareholders' equity figures show a highly volatile pattern. Starting at US$214 million in 2016, the value spikes sharply to US$5,385 million in 2017, followed by a significant negative swing in 2018 and 2019 with values of -US$2,606 million and -US$2,295 million, respectively. In 2020, this value recovers to a small positive US$145 million before again dropping slightly to -US$224 million in 2021. Such volatility suggests considerable adjustments affecting equity, potentially related to goodwill or other intangible asset revaluations.

Reported Return on Equity (ROE)

The reported ROE experiences substantial variation over the period. Beginning at 12.79% in 2016, which reflects a healthy profitability level relative to equity, it drops significantly to 8.5% in 2017, and further declines to a low of 1.48% in 2018. A moderate recovery is noted in 2019 and 2020 with ROE values of 5.85% and 3.68%, respectively, followed by a more pronounced improvement to 8.84% in 2021. The low ROE values in the middle years point to diminished profitability or increased equity base without corresponding profit growth.

Adjusted Return on Equity (ROE)

The adjusted ROE follows an erratic pattern with only partial data available. The extraordinarily high value of 456.07% in 2016 indicates an unusual adjustment effect or a very small denominator in equity that inflates the ratio. This sharply decreases to 20.43% in 2017; data for 2018 and 2019 are missing, then an extremely high adjusted ROE of 602.76% appears in 2020, suggesting a reoccurrence of the earlier abnormal conditions. No data for 2021 is provided. These extremes point to significant distortions when adjustments are made, making the adjusted ROE unreliable or highlighting underlying accounting anomalies.

The analysis of the annual financial data reveals several notable trends over the reported periods from 2016 to 2021.

Total Assets

The reported total assets show a significant upward trend from 25,586 million USD in 2016 to a peak of 53,904 million USD in 2018. After this peak, the reported assets decline slightly to 51,765 million USD in 2019, then rise again to 54,012 million USD in 2020, followed by a slight decrease to 53,866 million USD in 2021. In contrast, the adjusted total assets, which exclude goodwill, follow a different trajectory. They start lower at 18,167 million USD in 2016, surge to 30,171 million USD in 2017, and then remain relatively stable with minor fluctuations around the 28,000 to 30,400 million USD range through to 2021. This divergence indicates that goodwill or other intangible factors account for a substantial portion of the reported total assets and that the company's asset base excluding goodwill stabilized after 2017.

Return on Assets (ROA)

Regarding profitability as measured by ROA, the reported ROA starts at 3.81% in 2016 and exhibits a generally volatile pattern, decreasing sharply to 0.58% in 2018, then improving steadily to reach 3.88% by 2021. The adjusted ROA, which considers assets excluding goodwill, shows a similar but more pronounced volatility. It starts higher at 5.37% in 2016, drops to 1.03% in 2018, rebounds to a peak of 6.98% in 2021. This pattern suggests that profitability relative to asset base excluding goodwill is notably more variable but culminates in a stronger return by the latest year reported. The adjusted ROA consistently exceeds the reported ROA, reflecting that goodwill inclusion in asset base tends to dilute return measures.

Overall Insights

The data indicates a substantial increase in reported assets driven by goodwill or intangibles, which reach a peak around 2017-2018. Despite fluctuations, the adjusted asset levels have stabilized, implying that the underlying asset base is steady. Profitability experienced a decline in mid-period years but recovered significantly by 2021, both in reported and adjusted terms, with adjusted profitability showing greater resilience and improvement. These trends collectively suggest that while intangible asset valuations impacted the total asset figures, the core business operations exhibited recovery and enhanced efficiency in asset utilization over time.