Becton, Dickinson & Co. (NYSE:BDX)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes demonstrated significant fluctuations over the analyzed period. Starting at 717 million USD in 2016, the figure increased sharply to 1300 million USD in 2017, followed by a considerable decline to 570 million USD in 2018. Subsequently, NOPAT recovered substantially, reaching 1105 million USD in 2019, then slightly decreased to 991 million USD in 2020, before more than doubling to 2155 million USD in 2021. This indicates a volatile profitability pattern with a strong rebound in the final year.

Invested Capital

Invested capital showed a general upward trend from 22,258 million USD in 2016 to a peak of 47,282 million USD in 2018. After this peak, the invested capital experienced a moderate decline to 45,181 million USD in 2019 and then remained relatively stable at approximately 46,000 million USD in 2020 and 45,278 million USD in 2021. This suggests that the company increased its capital base significantly up to 2018, followed by a slight contraction and stabilization in subsequent years.

Return on Invested Capital (ROIC)

The return on invested capital showed a fluctuating yet generally low performance through much of the period. Starting at 3.22% in 2016, it rose modestly to 3.75% in 2017 but then dropped sharply to 1.21% in 2018. There was a recovery to 2.44% in 2019, followed by a slight decline to 2.14% in 2020. In 2021, ROIC exhibited a notable increase to 4.76%, the highest point in the period under review. This pattern reflects underlying volatility in profitability relative to capital investment, with a marked improvement in the last year.

Overall Insights

Over the six-year period analyzed, the company displayed significant variability in profitability and returns on capital, with the most substantial improvements occurring in 2021. The invested capital expanded considerably until 2018, then plateaued with slight decreases thereafter, while NOPAT and ROIC were more volatile. The final year’s sharp increase in both NOPAT and ROIC suggests an improvement in operational efficiency or profitability, possibly due to changes in business strategy, cost management, or market conditions.

Operating Profit Margin (OPM)

The operating profit margin exhibited a relatively stable trend from 2016 to 2018, fluctuating slightly around 11.6%. However, there was a significant decline in 2019 and 2020, with the margin dropping to 10.5% and then to 8.76%, respectively. This was followed by a notable recovery in 2021, with the margin rising sharply to 13.29%, marking the highest point in the period analyzed.

Turnover of Capital (TO)

The turnover of capital showed a sharp decrease from 0.56 in 2016 to 0.35 in 2017 and remained relatively stable but lower in 2018 at 0.34. A gradual increase was observed starting 2019, with the ratio rising to 0.38 and remaining close to that level in 2020 at 0.37. In 2021, the turnover of capital improved further, reaching 0.45, indicating a recovery in asset utilization efficiency.

1 – Effective Cash Tax Rate (CTR)

The metric for 1 – effective cash tax rate displayed notable volatility throughout the period, starting relatively moderate at 48.94% in 2016, spiking sharply to 92.28% in 2017, and then dropping to a low of 30.74% in 2018. It increased again to 60.84% in 2019 and slightly higher at 66.1% in 2020, followed by a further rise to 80.06% in 2021. These fluctuations suggest significant year-to-year variability in the effective cash tax impacts on the company.

Return on Invested Capital (ROIC)

Return on invested capital demonstrated a generally low-return profile with noticeable fluctuations. It began at 3.22% in 2016 and experienced a moderate increase to 3.75% in 2017. The metric then declined sharply to 1.21% in 2018, recovered slightly to 2.44% in 2019, and dipped marginally to 2.14% in 2020. The most significant positive change occurred in 2021, with ROIC rising to 4.76%, the highest in the dataset, indicating improved efficiency and profitability from invested capital.

The financial data indicates notable variations in profitability and revenue performance over the reported periods.

Net Operating Profit Before Taxes (NOPBT)

NOPBT showed an overall upward trend with fluctuations. Starting at 1,464 million USD in 2016, it saw a slight decline in 2017 to 1,408 million USD, followed by a significant increase to 1,855 million USD in 2018. The figure remained relatively stable in 2019 at 1,816 million USD but decreased again to 1,500 million USD in 2020. A substantial increase occurred in 2021, reaching 2,691 million USD, the highest value in the observed timeframe.

Revenues

Revenues experienced a general increase over the six-year period with some variations. Starting from 12,483 million USD in 2016, revenues declined slightly to 12,093 million USD in 2017. This was followed by a significant rise to 15,983 million USD in 2018, continuing upwards to 17,290 million USD in 2019. A minor decline was recorded in 2020, dropping to 17,117 million USD, but revenues subsequently rose markedly to 20,248 million USD in 2021.

Operating Profit Margin (OPM)

The operating profit margin demonstrated a declining trend from 2016 through 2020, starting at 11.73% and decreasing steadily to 8.76% in 2020. However, in 2021, the margin improved significantly to 13.29%, representing the highest margin in the series and indicating enhanced operational efficiency or cost management in that year.

In summary, while both revenues and NOPBT exhibited fluctuations, the recovery in 2021 with strong increases in both measures alongside a higher operating profit margin suggests improved profitability and operational performance in the most recent year reported. The dip in margins and profits around 2020 could be indicative of challenges faced during that period, potentially linked to broader economic or sector-specific factors.

Revenues

Revenues demonstrated an overall upward trend from 2016 to 2021. Starting at $12,483 million in 2016, revenues experienced a slight decrease in 2017 to $12,093 million, followed by significant growth in 2018 to $15,983 million. This positive trajectory continued with revenues increasing steadily to $17,290 million in 2019 and slightly declining to $17,117 million in 2020. The most notable increase occurred in 2021, with revenues reaching $20,248 million, the highest level recorded in the period.

Invested Capital

Invested capital showed a marked increase over the six years, starting from $22,258 million in 2016 to a peak of $47,282 million in 2018. After peaking, invested capital slightly decreased to $45,181 million in 2019, then stabilized with minor fluctuations, recording $46,312 million in 2020 and concluding with $45,278 million in 2021. This pattern suggests significant capital deployment in the initial years, followed by relative stabilization in later years.

Turnover of Capital (TO)

The turnover of capital ratio indicated an initial decline from 0.56 in 2016 to 0.34 in 2018, pointing to reduced efficiency in generating revenue from invested capital during this period. Thereafter, the ratio exhibited slight improvements, rising to 0.38 in 2019 and maintaining a similar level of 0.37 in 2020. The most notable recovery occurred in 2021 when the ratio increased to 0.45, reflecting an improved ability to generate revenues from the capital invested compared to the previous years, though still below the 2016 level.

Overall Analysis

Over the analyzed period, revenues generally increased substantially, reflecting strong business growth. Invested capital also rose significantly, especially in the early years, indicating expansion or increased asset base. However, this capital investment initially outpaced revenue growth, leading to a decline in capital turnover ratios. Toward the end of the period, improvements in the turnover ratio suggest enhanced operational efficiency and better utilization of invested capital to drive revenue growth.

Cash Operating Taxes

The cash operating taxes exhibit considerable fluctuation over the observed periods. Starting at 748 million USD in 2016, there was a significant drop to 109 million USD in 2017, followed by a sharp increase to 1285 million USD in 2018. After this peak, cash taxes declined to 711 million USD in 2019 and continued to decrease to 508 million USD in 2020, before slightly rising again to 537 million USD in 2021. This volatility suggests variations in taxable income or changes in tax planning strategies over the years.

Net Operating Profit Before Taxes (NOPBT)

The net operating profit before taxes shows an overall increasing trend with some fluctuations. Starting at 1464 million USD in 2016, it slightly decreased to 1408 million USD in 2017. This was followed by a notable increase to 1855 million USD in 2018 and a slight decrease to 1816 million USD in 2019. In 2020, there was a decline to 1500 million USD, but the figure sharply rose to the highest value of 2691 million USD in 2021. This growth in NOPBT towards the end of the period indicates improved operational profitability.

Effective Cash Tax Rate (CTR)

The effective cash tax rate shows a highly variable pattern, reflecting the changes in cash operating taxes relative to the NOPBT. It began at a relatively high rate of 51.06% in 2016, dropped significantly to 7.72% in 2017, and then increased dramatically to 69.26% in 2018. The rate decreased to 39.16% in 2019 and continued to decline to 33.9% in 2020, with a further reduction to 19.94% in 2021. The downward trend since 2018 suggests increased tax efficiency or changes in tax regulations or planning resulting in lower relative tax expenses.