Becton, Dickinson & Co. (NYSE:BDX)

The analysis of the quarterly financial ratios over the observed period reveals several key trends and fluctuations in the company’s financial performance and structure.

Return on Assets (ROA)

The ROA shows notable variability with an initial rise from March 2016, peaking around mid-2016 at approximately 5.45%. This is followed by a general decline through 2017, dropping to as low as 0.08% in the second quarter of 2018. Subsequently, there is a mild recovery with fluctuations around the 2% level through 2019 and early 2020. From the third quarter of 2020 onward, ROA demonstrates an upward trend, reaching values above 3.5% by the first quarter of 2022. This pattern suggests periods of both strong asset efficiency and relative underperformance, with recent quarters indicating improved utilization of assets to generate profit.

Financial Leverage

The financial leverage ratio exhibits a consistent downward trend from December 2015 through late 2017, decreasing from 3.61 to about 2.47, implying a gradual reduction in the reliance on debt relative to equity. This trend stabilizes somewhat with minor fluctuations between 2.21 and 2.28 from 2018 through early 2022. Lower leverage levels may reflect a more conservative capital structure or deleveraging strategy over this period.

Return on Equity (ROE)

The ROE mirrors the general movement of ROA with some amplification due to leverage effects. It peaks in mid-2016 around 17.26%, followed by a sharp decline to a trough near 0.22% in the second quarter of 2018. Afterward, the ROE experiences gradual recovery with fluctuations, achieving values in the range of approximately 6% to 8.8% from the end of 2020 through early 2022. This trajectory reflects varying profitability levels on shareholder equity, influenced by both operational results and changes in financial leverage.

Overall, the data indicate a period of profitability contraction around 2017-2018 with low returns on both assets and equity, potentially reflecting operational challenges or market conditions. The subsequent recovery in ROA and ROE, aligned with reduced financial leverage, points to improved operational efficiency and a more stable capital structure in the later periods under review.

The analysis of the quarterly financial ratios reveals several notable trends and fluctuations over the examined periods.

Net Profit Margin

The net profit margin exhibited variability across quarters. Starting from a level of 7.82% in the fourth quarter of 2015, it increased to a peak of around 10.67% by mid-2016 but showed a declining trend thereafter, reaching a low of 0.34% in early 2018. Following this trough, the ratio demonstrated a moderate recovery with intermittent fluctuations, moving between approximately 5.11% and 10.33% over the subsequent periods. The data suggest some cyclical profitability pressures but an overall tendency toward stabilization at a moderate profit margin level in recent quarters.

Asset Turnover

The asset turnover ratio maintained relative stability with slight variations. It started near 0.49 in late 2015, peaked briefly at 0.51 in mid-2016, then declined to around 0.22 by early 2018. From that point onward, the ratio gradually increased, reaching approximately 0.38 by the first quarter of 2022. This indicates a gradual improvement in the efficiency of asset utilization over the longer term, despite some short-term decreases.

Financial Leverage

The financial leverage ratio showed a consistent downward trend throughout the period. Beginning at 3.61 in the fourth quarter of 2015, the ratio steadily decreased to values close to 2.21 by late 2021, with slight minor variations around that level thereafter. This declining trend points to reduced reliance on debt financing or overall de-leveraging of the company's capital structure over time, contributing potentially to lower financial risk.

Return on Equity (ROE)

The return on equity experienced notable fluctuations, mirroring somewhat the pattern seen in net profit margin. After a starting point of around 12.79% in late 2015, ROE rose to a high of 17.26% in mid-2016, followed by a sharp fall to 0.22% by mid-2018. Subsequently, ROE improved progressively, reaching values near 8.84% by the penultimate quarter and fluctuating slightly before settling near 7.83%. This suggests that shareholder returns were volatile but demonstrated recovery and relative stabilization in recent quarters, likely influenced by operational profitability and leverage changes.

In summary, the data reflect a company experiencing some volatility in profitability and returns in the earlier years, with signs of operational efficiency gains and financial de-leveraging contributing to a more stabilized financial performance in the later periods.

The financial data reveals several notable trends and fluctuations over the analyzed periods. The Tax Burden ratio exhibits volatility, ranging from a low of 0.27 to a high of 1.39. Despite these fluctuations, it generally trends close to 0.9 in the latest quarters, indicating some variability in tax expenses relative to earnings before tax.

The Interest Burden ratio varies significantly, with values oscillating between 0.05 and 0.83. Early large dips indicate periods of minimal interest expenses relative to earnings before interest and tax, while more recent quarters stabilize around 0.8, suggesting a consistent interest expense burden.

The EBIT Margin shows an erratic pattern, beginning around 11.71%, peaking above 15%, then dropping to near 5.3%, before regaining and oscillating around 12-13% in later quarters. This reflects fluctuating operational profitability, possibly due to market or cost pressures.

Asset Turnover ratios predominantly hover between 0.22 and 0.51, with a general tendency towards the lower end in recent quarters (around 0.37). This indicates modest efficiency in generating revenue from assets, with slight improvements toward the latest periods.

Financial Leverage steadily declines from 3.61 at the start to around 2.2-2.3 in the later periods, suggesting a strategic reduction in debt usage or equity financing adjustments, which may affect risk and return dynamics.

Return on Equity (ROE) demonstrates considerable volatility, with early double-digit returns (up to 17.26%), then plunging to nearly zero or low single digits, and modest recovery back to near 8-9% later on. This indicates inconsistent earnings generation relative to shareholder equity, possibly influenced by the fluctuations seen in margins, leverage, and burdens.

Overall, the company has experienced variable operational profitability and financial burdens, with some improvement in efficiency metrics and deleveraging strategies. The inconsistent ROE mirrors these dynamics, emphasizing the impact of fluctuating operational results and capital structure on shareholder returns.

The analysis of the quarterly financial ratios reveals various trends in profitability and efficiency metrics over the observed periods.

Net Profit Margin (%)

The net profit margin demonstrates considerable volatility across the periods. Starting from an initial measure of 7.82%, it increased to a peak of 10.67% in mid-2016 before sharply declining to 3.28% by early 2017. The margin continued to fluctuate significantly thereafter, with lows near 0.34% in mid-2017 and several intermittent rebounds reaching above 9% by late 2018 and again around late 2020 to early 2021. The latest available data shows values stabilizing slightly above 8%, suggesting a partial recovery after periods of reduced profitability. Overall, this indicates cyclical profitability pressures and periods of recovery.

Asset Turnover (ratio)

Asset turnover ratios display a declining trend initially from 0.49 to 0.22 between end of 2015 and early 2017, indicating decreasing efficiency in utilizing assets to generate revenue. Subsequent observations reveal a gradual recovery and stabilization, with values moving steadily upward from 0.25 in mid-2017 to around 0.37 in early 2022. This upward trend implies an improvement in asset utilization efficiency in the more recent periods following a phase of lower productivity.

Return on Assets (ROA) (%)

Return on assets mirrors the volatility seen in net profit margins but with lower magnitude. Initial ROA values fluctuated between 3.81% and a low of 0.08% in late 2017, reflecting challenges in asset profitability. From 2018 onward, ROA shows a gradual upward trend with minor fluctuations, reaching around 3.31% to 3.88% in late 2021 and early 2022. This gradual increase indicates improving efficiency in generating returns from total assets, although the ratio remains below earlier peak levels observed in mid-2016.

In summary, the data indicates a period of initial declining efficiency and profitability followed by recovery and gradual improvement in the recent years. Despite fluctuations, there is evidence of enhanced asset utilization and modest gains in profitability margins towards the later periods analyzed. These patterns suggest responsiveness to external conditions or internal strategic adjustments affecting financial performance over time.

The quarterly financial indicators display varied trends over the observed period. The Tax Burden ratio fluctuates significantly, initially improving from 0.91 to a low of 0.27 before stabilizing around the 0.9 to 1.0 range in the more recent quarters, indicating variable but improving tax efficiency.

The Interest Burden ratio demonstrates a general upward trend, moving from around 0.73 to approximately 0.83, with minor oscillations. This trend suggests a gradual reduction in the relative impact of interest expenses on earnings, enhancing operational leverage.

The EBIT Margin displays substantial volatility, with early readings near 11.71% rising to a peak around 15% and subsequently declining to lows close to 5.3%, followed by recovery to the 12-13% range in recent quarters. Despite the fluctuations, the margin generally remains positive, indicating ongoing profitability albeit with operational challenges in some periods.

Asset Turnover ratios are relatively stable but on a mild declining trend initially, moving from approximately 0.49 down to around 0.22, before an increase to nearly 0.37 toward the end of the observed timeline. This pattern suggests a period of reduced efficiency in asset utilization followed by gradual improvement.

The Return on Assets (ROA) reflects considerable variability, declining from near 3.81% to a low of approximately 0.08%, with subsequent recovery to peaks around 3.88%. This indicates substantial fluctuations in overall asset profitability, likely influenced by corresponding changes in EBIT Margin and Asset Turnover.

Summary of Key Trends:

Tax Burden ratio shows large fluctuations but stabilizes in later periods, pointing to improved tax management.

Interest Burden ratio increases gradually, implying reduced interest expense impact on income.

EBIT Margin is volatile with an overall moderate recovery, reflecting variable operational performance.

Asset Turnover experiences decline followed by recovery, indicating changing efficiency in asset use.

Return on Assets mirrors EBIT and turnover trends with marked volatility, concluding with an upward movement.

The financial ratios over the observed periods reveal several noteworthy patterns related to the tax burden, interest burden, EBIT margin, and net profit margin.

Tax Burden

The tax burden ratio displays considerable variability through the quarters. Starting at 0.91, it exhibited a decline in early 2016, reaching as low as 0.27 at one point, indicating reduced tax impact relative to earnings. Following this low, the ratio fluctuated, rising above 1.0 several times, suggesting periods where taxes exceeded typical levels relative to pre-tax income. The ratio tends to stabilize around 0.9 to 1.0 towards the latest periods, reflecting more consistent tax impact.

Interest Burden

The interest burden ratio shows a downward trend moving into 2016 and 2017, beginning around 0.73 and dropping to very low values near 0.05 at one quarter, indicating minimal interest expense relative to EBIT during that period. After this dip, the ratio gradually increased again, fluctuating mostly between 0.6 and 0.8, with some periods slightly above 0.8 towards the end of the timeframe, indicating a moderate and somewhat increasing interest expense burden in relation to operating income.

EBIT Margin

The EBIT margin percentage demonstrates notable fluctuations across the quarters. It peaks above 15% in early and mid-2016, followed by a decline to roughly 5.3% in mid-2017. Subsequently, the margin recovers and stabilizes mostly between 11% and 14% for a number of quarters, before trending slightly downward below 10% during parts of 2019 and 2020. Towards the end of the reviewed periods, the margin improves somewhat, reaching above 12%, indicating a recovery in operating profitability.

Net Profit Margin

The net profit margin closely follows similar cyclical patterns to the EBIT margin but exhibits more volatility. It reaches a high point above 10% in parts of 2016 and again towards late 2021 and early 2022. However, it also dips severely to near zero in mid-2017, reflecting a quarter of very low profitability after expenses and taxes. Following this low, there is a gradual recovery trend, with the margin generally stabilizing between 5% and 10%, indicating moderate overall net profitability despite interim volatility.

Overall, the data suggests periods of varying tax and interest impact on income, with operating and net profitability demonstrating recovery after mid-decade declines. The margins show resilience with a tendency to revert back towards moderate profitability levels despite fluctuations, highlighting challenges and subsequent improvements in cost and expense management over the evaluated quarters.