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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Becton, Dickinson & Co., economic profit calculation

US$ in millions

12 months ended:	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016
Net operating profit after taxes (NOPAT)¹	2,155)	991)	1,105)	570)	1,300)	717)
Cost of capital²	9.14%	9.11%	9.07%	8.85%	8.58%	8.92%
Invested capital³	45,278)	46,312)	45,181)	47,282)	34,655)	22,258)

Economic profit⁴	(1,985)	(3,229)	(2,994)	(3,614)	(1,674)	(1,269)

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).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2021 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 2,155 – 9.14% × 45,278 = -1,985

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Becton, Dickinson & Co. economic profit decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Becton, Dickinson & Co., NOPAT calculation

US$ in millions

12 months ended:	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016
Net income	2,092)	874)	1,233)	311)	1,100)	976)
Deferred income tax expense (benefit)¹	(288)	(286)	(633)	(262)	(74)	(519)
Increase (decrease) in allowance for doubtful accounts²	(4)	5)	—)	21)	(7)	8)
Increase (decrease) in restructuring liability³	(17)	(21)	(3)	5)	(14)	7)
Increase (decrease) in equity equivalents⁴	(309)	(302)	(636)	(236)	(95)	(504)
Interest expense	469)	528)	639)	706)	521)	388)
Interest expense, operating lease liability⁵	10)	10)	16)	15)	8)	9)
Adjusted interest expense	479)	538)	655)	721)	529)	397)
Tax benefit of interest expense⁶	(101)	(113)	(137)	(177)	(185)	(139)
Adjusted interest expense, after taxes⁷	379)	425)	517)	544)	344)	258)
Interest income	(9)	(7)	(12)	(65)	(76)	(21)
Investment income, before taxes	(9)	(7)	(12)	(65)	(76)	(21)
Tax expense (benefit) of investment income⁸	2)	1)	3)	16)	27)	7)
Investment income, after taxes⁹	(7)	(6)	(9)	(49)	(49)	(14)
Net operating profit after taxes (NOPAT)	2,155)	991)	1,105)	570)	1,300)	717)

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).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for doubtful accounts.

³ Addition of increase (decrease) in restructuring liability.

⁴ Addition of increase (decrease) in equity equivalents to net income.

⁵ 2021 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 470 × 2.20% = 10

⁶ 2021 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 479 × 21.00% = 101

⁷ Addition of after taxes interest expense to net income.

⁸ 2021 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 9 × 21.00% = 2

⁹ Elimination of after taxes investment income.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Becton, Dickinson & Co. NOPAT decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Becton, Dickinson & Co., cash operating taxes calculation

US$ in millions

12 months ended:	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016
Income tax provision (benefit)	150)	111)	(57)	862)	(124)	97)
Less: Deferred income tax expense (benefit)	(288)	(286)	(633)	(262)	(74)	(519)
Add: Tax savings from interest expense	101)	113)	137)	177)	185)	139)
Less: Tax imposed on investment income	2)	1)	3)	16)	27)	7)
Cash operating taxes	537)	508)	711)	1,285)	109)	748)

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).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Becton, Dickinson & Co. cash operating taxes decreased from 2019 to 2020 but then slightly increased from 2020 to 2021.

Becton, Dickinson & Co., invested capital calculation (financing approach)

US$ in millions

	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016
Short-term debt	500)	707)	1,309)	2,601)	203)	1,001)
Long-term debt, excluding current portion	17,110)	17,224)	18,081)	18,894)	18,667)	10,550)
Operating lease liability¹	470)	442)	490)	456)	250)	250)
Total reported debt & leases	18,080)	18,373)	19,880)	21,951)	19,120)	11,801)
Shareholders’ equity	23,677)	23,765)	21,081)	20,994)	12,948)	7,633)
Net deferred tax (assets) liabilities²	1,350)	1,530)	1,834)	2,310)	776)	792)
Allowance for doubtful accounts³	76)	80)	75)	75)	54)	61)
Restructuring liability⁴	19)	36)	57)	60)	55)	69)
Equity equivalents⁵	1,445)	1,646)	1,966)	2,445)	885)	922)
Accumulated other comprehensive (income) loss, net of tax⁶	2,088)	2,548)	2,284)	1,909)	1,723)	1,929)
Adjusted shareholders’ equity	27,210)	27,959)	25,331)	25,348)	15,556)	10,484)
Short-term investments⁷	(12)	(20)	(30)	(17)	(21)	(27)
Invested capital	45,278)	46,312)	45,181)	47,282)	34,655)	22,258)

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).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of restructuring liability.

⁵ Addition of equity equivalents to shareholders’ equity.

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of short-term investments.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Becton, Dickinson & Co. invested capital increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.

Becton, Dickinson & Co., cost of capital calculations

Sep 30, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	69,432)	69,432)	÷	90,561)	=	0.77	0.77	×	11.21%	=	8.59%
6.125% Cumulative Preferred Stock, Series A	—)	—)	÷	90,561)	=	0.00	0.00	×	0.00%	=	0.00%
6.00% Mandatory Convertible Preferred Stock, Series B	1,619)	1,619)	÷	90,561)	=	0.02	0.02	×	5.56%	=	0.10%
Debt³	19,040)	19,040)	÷	90,561)	=	0.21	0.21	×	2.65% × (1 – 21.00%)	=	0.44%
Operating lease liability⁴	470)	470)	÷	90,561)	=	0.01	0.01	×	2.20% × (1 – 21.00%)	=	0.01%
Total:	90,561)					1.00					9.14%

Based on: 10-K (reporting date: 2021-09-30).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	65,973)	65,973)	÷	87,672)	=	0.75	0.75	×	11.21%	=	8.44%
6.125% Cumulative Preferred Stock, Series A	—)	—)	÷	87,672)	=	0.00	0.00	×	0.00%	=	0.00%
6.00% Mandatory Convertible Preferred Stock, Series B	1,580)	1,580)	÷	87,672)	=	0.02	0.02	×	5.70%	=	0.10%
Debt³	19,677)	19,677)	÷	87,672)	=	0.22	0.22	×	3.19% × (1 – 21.00%)	=	0.57%
Operating lease liability⁴	442)	442)	÷	87,672)	=	0.01	0.01	×	2.20% × (1 – 21.00%)	=	0.01%
Total:	87,672)					1.00					9.11%

Based on: 10-K (reporting date: 2020-09-30).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	70,428)	70,428)	÷	94,492)	=	0.75	0.75	×	11.21%	=	8.35%
6.125% Cumulative Preferred Stock, Series A	3,065)	3,065)	÷	94,492)	=	0.03	0.03	×	4.96%	=	0.16%
6.00% Mandatory Convertible Preferred Stock, Series B	—)	—)	÷	94,492)	=	0.00	0.00	×	0.00%	=	0.00%
Debt³	20,509)	20,509)	÷	94,492)	=	0.22	0.22	×	3.17% × (1 – 21.00%)	=	0.54%
Operating lease liability⁴	490)	490)	÷	94,492)	=	0.01	0.01	×	3.17% × (1 – 21.00%)	=	0.01%
Total:	94,492)					1.00					9.07%

Based on: 10-K (reporting date: 2019-09-30).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	64,929)	64,929)	÷	90,033)	=	0.72	0.72	×	11.21%	=	8.08%
6.125% Cumulative Preferred Stock, Series A	3,235)	3,235)	÷	90,033)	=	0.04	0.04	×	4.69%	=	0.17%
6.00% Mandatory Convertible Preferred Stock, Series B	—)	—)	÷	90,033)	=	0.00	0.00	×	0.00%	=	0.00%
Debt³	21,413)	21,413)	÷	90,033)	=	0.24	0.24	×	3.25% × (1 – 24.50%)	=	0.58%
Operating lease liability⁴	456)	456)	÷	90,033)	=	0.01	0.01	×	3.25% × (1 – 24.50%)	=	0.01%
Total:	90,033)					1.00					8.85%

Based on: 10-K (reporting date: 2018-09-30).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	51,120)	51,120)	÷	73,514)	=	0.70	0.70	×	11.21%	=	7.79%
6.125% Cumulative Preferred Stock, Series A	2,735)	2,735)	÷	73,514)	=	0.04	0.04	×	5.54%	=	0.21%
6.00% Mandatory Convertible Preferred Stock, Series B	—)	—)	÷	73,514)	=	0.00	0.00	×	0.00%	=	0.00%
Debt³	19,409)	19,409)	÷	73,514)	=	0.26	0.26	×	3.34% × (1 – 35.00%)	=	0.57%
Operating lease liability⁴	250)	250)	÷	73,514)	=	0.00	0.00	×	3.34% × (1 – 35.00%)	=	0.01%
Total:	73,514)					1.00					8.58%

Based on: 10-K (reporting date: 2017-09-30).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2016

	Capital (fair value)¹	Weights					Cost of capital
Equity²	35,772)	35,772)	÷	48,321)	=	0.74	0.74	×	11.21%	=	8.30%
6.125% Cumulative Preferred Stock, Series A	—)	—)	÷	48,321)	=	0.00	0.00	×	0.00%	=	0.00%
6.00% Mandatory Convertible Preferred Stock, Series B	—)	—)	÷	48,321)	=	0.00	0.00	×	0.00%	=	0.00%
Debt³	12,299)	12,299)	÷	48,321)	=	0.25	0.25	×	3.68% × (1 – 35.00%)	=	0.61%
Operating lease liability⁴	250)	250)	÷	48,321)	=	0.01	0.01	×	3.68% × (1 – 35.00%)	=	0.01%
Total:	48,321)					1.00					8.92%

Based on: 10-K (reporting date: 2016-09-30).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Becton, Dickinson & Co., economic spread ratio calculation, comparison to benchmarks

	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016
Selected Financial Data (US$ in millions)
Economic profit¹	(1,985)	(3,229)	(2,994)	(3,614)	(1,674)	(1,269)
Invested capital²	45,278)	46,312)	45,181)	47,282)	34,655)	22,258)
Performance Ratio
Economic spread ratio³	-4.38%	-6.97%	-6.63%	-7.64%	-4.83%	-5.70%
Benchmarks
Economic Spread Ratio, Competitors⁴
Abbott Laboratories	0.79%	-2.47%	-3.79%	—	—	—
Cigna Group	-0.18%	2.71%	-0.50%	—	—	—
CVS Health Corp.	0.00%	0.44%	-0.33%	—	—	—
Elevance Health Inc.	1.21%	-0.78%	0.06%	—	—	—
Humana Inc.	2.71%	9.58%	7.71%	—	—	—
Intuitive Surgical Inc.	21.02%	9.01%	25.69%	—	—	—
Medtronic PLC	-4.05%	-3.18%	-2.09%	-5.68%	—	—
Shockwave Medical Inc.	-16.35%	-82.53%	-43.52%	—	—	—
UnitedHealth Group Inc.	4.62%	5.20%	5.22%	—	—	—

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).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2021 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -1,985 ÷ 45,278 = -4.38%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Becton, Dickinson & Co. economic spread ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Becton, Dickinson & Co., economic profit margin calculation, comparison to benchmarks

	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016
Selected Financial Data (US$ in millions)
Economic profit¹	(1,985)	(3,229)	(2,994)	(3,614)	(1,674)	(1,269)
Revenues	20,248)	17,117)	17,290)	15,983)	12,093)	12,483)
Performance Ratio
Economic profit margin²	-9.80%	-18.86%	-17.32%	-22.61%	-13.85%	-10.16%
Benchmarks
Economic Profit Margin, Competitors³
Abbott Laboratories	1.14%	-4.31%	-6.92%	—	—	—
Cigna Group	-0.10%	1.60%	-0.31%	—	—	—
CVS Health Corp.	0.00%	0.23%	-0.18%	—	—	—
Elevance Health Inc.	0.57%	-0.37%	0.03%	—	—	—
Humana Inc.	1.00%	2.75%	2.26%	—	—	—
Intuitive Surgical Inc.	16.54%	9.24%	19.04%	—	—	—
Medtronic PLC	-9.71%	-7.84%	-4.97%	-13.44%	—	—
Shockwave Medical Inc.	-12.02%	-111.12%	-160.86%	—	—	—
UnitedHealth Group Inc.	2.27%	2.65%	2.55%	—	—	—

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).

¹ Economic profit. See details »

² 2021 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenues
= 100 × -1,985 ÷ 20,248 = -9.80%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Becton, Dickinson & Co. economic profit margin deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Becton, Dickinson & Co. (NYSE:BDX)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin