Analysis of Property, Plant and Equipment
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- Balance Sheet: Assets
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Common Stock Valuation Ratios
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
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Property, Plant and Equipment Disclosure
Becton, Dickinson & Co., balance sheet: property, plant and equipment
US$ in millions
Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).
The financial data on property, plant, and equipment over the six-year period reveals several notable trends. The gross value of property, plant, and equipment consistently increased each year, rising from $8,419 million in 2016 to $12,942 million in 2021. This steady growth indicates ongoing investment and expansion in physical assets.
- Land
- The value of land showed minor fluctuations with a slight decline overall, starting at $151 million in 2016, peaking at $173 million in 2018, and then declining to $137 million by 2021. This suggests relatively stable but modest changes in land holdings or revaluation adjustments.
- Buildings
- The buildings’ value consistently increased from $2,397 million to $3,264 million over the period. The increments each year indicate continuous investment in infrastructure and facility expansion.
- Machinery, equipment, and fixtures
- This category exhibited the largest growth and overall magnitude, rising from $5,749 million to $9,300 million. The increase reflects substantial capital expenditure on operational and manufacturing equipment.
- Leasehold improvements
- Leasehold improvements showed steady growth from $122 million to $241 million, nearly doubling across the timeframe. This suggests increased enhancement or customization of leased properties in alignment with operational needs.
- Accumulated depreciation and amortization
- Depreciation and amortization grew in magnitude negatively from -$4,518 million to -$6,549 million. The rising accumulated depreciation is expected given the increasing asset base and indicates ongoing usage and aging of assets.
- Net property, plant, and equipment
- The net value, after accounting for accumulated depreciation, rose from $3,901 million in 2016 to $6,393 million in 2021. This consistent net growth confirms that asset additions and investments have outpaced the depreciation charges, resulting in a strengthened asset base.
Overall, the data suggests a strategic focus on augmenting physical assets, especially machinery and buildings, to support business growth. The steady increase in net property, plant, and equipment indicates healthy asset renewal and expansion, while the relatively stable land value points to limited changes in land holdings.
Asset Age Ratios (Summary)
Becton, Dickinson & Co., asset age ratios
Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).
The analysis of the property, plant, and equipment data reveals several significant trends over the periods considered.
- Average Age Ratio (%)
- The average age ratio demonstrated a declining trend from 54.64% in 2016 to a low of 49.55% in 2018, indicating a relative decrease in the age of assets compared to their useful life during this period. However, after 2018, the ratio slightly increased and stabilized around 51% by 2020 and 2021, suggesting a marginal aging of the asset base in more recent years.
- Estimated Total Useful Life (years)
- The estimated total useful life fluctuated considerably across the years. Starting at 18 years in 2016, it increased notably to 23 years in 2017, then dropped sharply to 17 years from 2018 through 2019 before returning to 18 years in 2020 and 2021. This variability may reflect changes in the asset composition, accounting estimates, or revisions in asset management policy.
- Estimated Age, Time Elapsed Since Purchase (years)
- The estimated age of assets increased from 10 years in 2016 to 12 years in 2017 but then decreased to 9 years from 2018 onwards and remained constant thereafter. This shift suggests significant asset disposals or additions occurred around 2017-2018, refreshing the asset base to a younger profile.
- Estimated Remaining Life (years)
- Estimated remaining life was 8 years in 2016, increased to 11 years in 2017, and then stabilized at 9 years for the subsequent years. This pattern aligns with changes seen in the total useful life and estimated age, indicating adjustments in asset longevity expectations or asset renewals impacting the remaining usable life.
Overall, the data indicates a period of adjustment around 2017-2018, characterized by increased asset useful life and a younger asset age profile following potential asset replacement or revaluation activities. Post-2018, the metrics suggest stability in asset aging and estimated useful lives, pointing to a steady state in asset management practices during the latter years.
Average Age
Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).
2021 Calculations
1 Average age = 100 × Accumulated depreciation and amortization ÷ (Property, plant and equipment, gross – Land)
= 100 × ÷ ( – ) =
The analysis of property, plant, and equipment (PPE) related financial data reveals several key trends over the period from 2016 to 2021.
- Accumulated Depreciation and Amortization
- There is a consistent upward trend in accumulated depreciation and amortization, increasing from US$4,518 million in 2016 to US$6,549 million in 2021. This steady rise suggests ongoing use and aging of the company's fixed assets over time, reflecting depreciation expense recorded across these years.
- Property, Plant and Equipment, Gross
- The gross value of property, plant, and equipment shows a continuous increase from US$8,419 million in 2016 to US$12,942 million in 2021. This growth indicates sustained investments in capital assets, with the company expanding or upgrading its physical resources over the period.
- Land
- The valuation of land fluctuates slightly, starting at US$151 million in 2016, rising to a peak of US$173 million in 2018, then declining to US$137 million by 2021. This pattern may reflect asset revaluation, disposals, or changes in land holdings, with a gradual decrease toward the end of the period.
- Average Age Ratio
- The average age ratio, denoting the relative aging of the PPE assets, decreases from 54.64% in 2016 to 49.55% in 2018, suggesting the asset base became relatively younger due to acquisitions or replacements. After this drop, the ratio slightly increases and stabilizes around 51% through 2021, indicating some aging of assets but overall maintenance of a balanced asset profile.
In summary, the data indicate a company actively investing in its fixed assets, leading to higher gross PPE and accumulated depreciation. The average age ratio's initial decline followed by stabilization could imply effective asset renewal strategies balancing growth with obsolescence management. The decline in land value towards the end of the period warrants attention for possible strategic shifts or asset reallocation.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).
2021 Calculations
1 Estimated total useful life = (Property, plant and equipment, gross – Land) ÷ Depreciation and amortization expense
= ( – ) ÷ =
The analysis of property, plant, and equipment (PP&E) data for the given periods reveals several noteworthy trends regarding gross asset values, components of PP&E, depreciation expense, and estimated useful life.
- Gross Property, Plant, and Equipment
- The gross value of property, plant, and equipment exhibits a consistent upward trend over the six-year period. Starting from approximately $8,419 million in 2016, it steadily increased each year, reaching $12,942 million by 2021. This represents a total increase of about 53.6%. The growth suggests sustained investment in physical assets aimed at capacity expansion or modernization.
- Land
- The value allocated to land remained relatively stable but displayed minor fluctuations. It started at $151 million in 2016 and slightly decreased to $137 million in 2021, with the highest recorded value being $173 million in 2018. The general level suggests that land acquisition or disposal activities were limited, with no significant expansion in land holdings.
- Depreciation and Amortization Expense
- Depreciation and amortization expenses followed an increasing pattern with minor irregularities. The expense was $452 million in 2016, dipped slightly to $406 million in 2017, then rose sharply to $600 million in 2018 and continued to climb up to $731 million by 2021. This upward trend is consistent with the increasing gross PP&E base, reflecting higher accumulated wear or usage of assets and possibly new asset additions that commenced depreciation.
- Estimated Total Useful Life
- The estimated total useful life of assets fluctuated between 17 and 23 years during the period. Initially at 18 years in 2016, it increased to 23 years in 2017, before settling back to a stable range of 17 to 18 years from 2018 onwards. The spike in 2017 could indicate a change in asset composition or revisions in depreciation policies. Post-2017, the stable life estimates suggest consistent asset management practices or stable asset types.
In summary, the data indicates strategic investments increasing the overall asset base, with stable land values implying controlled real estate exposure. The rise in depreciation expenses accompanies asset growth, while fluctuations in useful life estimations reflect adjustments in asset evaluation methodologies. These patterns highlight proactive asset management and ongoing capacity developments over the period under review.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).
2021 Calculations
1 Time elapsed since purchase = Accumulated depreciation and amortization ÷ Depreciation and amortization expense
= ÷ =
The financial data for property, plant, and equipment over the period from September 30, 2016, to September 30, 2021, demonstrates several notable trends related to depreciation and amortization.
- Accumulated depreciation and amortization
- This figure shows a consistent upward trend, increasing each year from US$4,518 million in 2016 to US$6,549 million in 2021. This steady rise indicates continual wear and usage of the company’s fixed assets over the years and reflects the cumulative allocation of the asset cost as an expense.
- Depreciation and amortization expense
- The annual expense fluctuates but generally trends upward. It decreased from US$452 million in 2016 to US$406 million in 2017, then sharply increased to US$600 million in 2018. Following this increase, the expense continued to rise gradually to US$731 million in 2021. This pattern may suggest variations in asset acquisitions, changes in depreciation methods, or adjustments in useful asset lives.
- Time elapsed since purchase
- The duration for the assets remains mostly stable, around 9 years in the most recent four years after an initial increase from 10 years in 2016 to 12 years in 2017. This consistent timeframe might indicate a relatively steady asset replacement or acquisition policy in later years or the presence of a main asset base with a similar age profile.
In summary, the accumulated depreciation and amortization steadily increased over the years, reflecting ongoing asset usage and aging. The depreciation expense shows variability but an overall increasing trend, which may imply shifting asset compositions or accounting estimates. The elapsed time since purchase stabilizes in recent periods, indicating possible consistency in asset management practices.
Estimated Remaining Life
Based on: 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30).
2021 Calculations
1 Estimated remaining life = (Property, plant and equipment, net – Land) ÷ Depreciation and amortization expense
= ( – ) ÷ =
The analysis of the property, plant, and equipment (PP&E) data reveals several notable trends over the period from 2016 to 2021.
- Net Property, Plant, and Equipment
- The net value of property, plant, and equipment shows a consistent upward trend, increasing from $3,901 million in 2016 to $6,393 million in 2021. This steady growth indicates ongoing investment in fixed assets or capital expenditures, reflecting expansion or modernization efforts.
- Land Asset Values
- The recorded value of land exhibits relative stability but with some fluctuations. Starting at $151 million in 2016, the value decreased to $146 million in 2017, then rose to a peak of $173 million in 2018 before experiencing a general decline to $137 million by 2021. This could suggest occasional asset revaluation or disposals affecting land holdings.
- Depreciation and Amortization Expense
- The depreciation and amortization expense demonstrates an overall increasing trend, moving from $452 million in 2016 to $731 million in 2021. The notable increase after 2017, including a jump from $406 million to $600 million in 2018, followed by steady increments, suggests accelerated asset wear or increased capital assets subject to depreciation.
- Estimated Remaining Life
- The estimated remaining life of the assets shows some variation, initially increasing from 8 years in 2016 to 11 years in 2017, then stabilizing at 9 years from 2018 onwards. This stabilization may reflect a standardized approach to asset lifespan estimation or consistent asset replacement cycles starting from 2018.
Overall, the data reflects a pattern of growth in net fixed assets concurrent with rising depreciation expenses, indicative of asset additions and related consumption over time. The fluctuations in land values and estimated remaining life provide insight into asset management and valuation practices. These trends collectively suggest an active management of property, plant, and equipment with ongoing investments and corresponding depreciation impacts typical of a growing operational footprint.