Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
Becton, Dickinson & Co., solvency 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).
A comprehensive review of the solvency metrics indicates a consistent and significant trend toward deleveraging and improved financial stability between September 30, 2016, and September 30, 2021. The organization has systematically reduced its reliance on debt relative to equity, capital, and assets, resulting in a strengthened balance sheet.
- Capital Structure and Equity Ratios
- The debt-to-equity ratio experienced a substantial decline, falling from 1.51 in 2016 to 0.74 by 2021. This downward trajectory is mirrored in the debt-to-capital ratio, which decreased from 0.60 to 0.43 over the same period. The inclusion of operating lease liabilities had a negligible impact on these trends, as the ratios remained nearly identical to the standard debt metrics. This suggests a strategic shift toward a more equity-heavy capital structure.
- Asset Leverage and Financial Risk
- Debt-to-assets ratios showed a general decline from 0.45 in 2016 to 0.33 in 2021, despite a brief increase to 0.50 in 2017. Parallel to this, financial leverage decreased steadily from 3.35 to 2.28. These movements indicate a reduction in the proportion of assets financed through debt, thereby lowering the overall financial risk profile of the entity.
- Debt Service and Coverage Capacity
- Interest coverage and fixed charge coverage ratios exhibited a U-shaped pattern. Both metrics declined between 2016 and 2018, with interest coverage dropping from 3.77 to 2.66 and fixed charge coverage falling from 3.15 to 1.92. However, a sharp recovery occurred by 2021, with interest coverage rising to 5.78 and fixed charge coverage increasing to 3.98. This recent surge indicates a significantly enhanced capacity to meet interest obligations and fixed charges relative to earnings.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Debt to Equity
Becton, Dickinson & Co., debt to equity 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) | |||||||
| 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) | |
| Total debt | 17,610) | 17,931) | 19,390) | 21,495) | 18,870) | 11,551) | |
| Shareholders’ equity | 23,677) | 23,765) | 21,081) | 20,994) | 12,948) | 7,633) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 0.74 | 0.75 | 0.92 | 1.02 | 1.46 | 1.51 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Abbott Laboratories | 0.50 | — | — | — | — | — | |
| Elevance Health Inc. | 0.64 | — | — | — | — | — | |
| Intuitive Surgical Inc. | 0.00 | — | — | — | — | — | |
| Medtronic PLC | 0.51 | — | — | — | — | — | |
| UnitedHealth Group Inc. | 0.64 | — | — | — | — | — | |
| Debt to Equity, Sector | |||||||
| Health Care Equipment & Services | 0.55 | — | — | — | — | — | |
| Debt to Equity, Industry | |||||||
| Health Care | 0.80 | — | — | — | — | — | |
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 2021 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 17,610 ÷ 23,677 = 0.74
2 Click competitor name to see calculations.
Analysis of the solvency profile reveals a consistent improvement in the capital structure over the observed six-year period. The debt-to-equity ratio exhibits a steady downward trajectory, indicating a strategic shift towards reduced financial leverage and an increased reliance on equity financing.
- Total Debt Trends
- Total debt experienced a sharp increase between 2016 and 2018, rising from 11,551 million US$ to a peak of 21,495 million US$. Following this peak, a consistent deleveraging trend occurred, with total debt declining annually to reach 17,610 million US$ by September 30, 2021.
- Shareholders' Equity Expansion
- A substantial and sustained increase in shareholders' equity was observed throughout the period. Equity grew from 7,633 million US$ in 2016 to 23,677 million US$ in 2021. This growth was most aggressive between 2016 and 2018, contributing significantly to the overall improvement in the solvency ratio.
- Debt to Equity Ratio Interpretation
- The debt-to-equity ratio declined steadily from 1.51 in 2016 to 0.74 in 2021. A critical transition occurred between 2018 and 2019, as the ratio fell below 1.00, indicating that shareholders' equity surpassed total debt. This progression reflects a diminished reliance on borrowed funds and an enhanced capacity to meet long-term obligations.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Debt to Equity (including Operating Lease Liability)
Becton, Dickinson & Co., debt to equity (including operating lease liability) 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) | |||||||
| 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) | |
| Total debt | 17,610) | 17,931) | 19,390) | 21,495) | 18,870) | 11,551) | |
| Current operating lease liabilities (recorded in Accrued expenses) | 126) | 106) | —) | —) | —) | —) | |
| Non-current operating lease liabilities (recorded in Deferred income taxes and other liabilities) | 344) | 336) | —) | —) | —) | —) | |
| Total debt (including operating lease liability) | 18,080) | 18,373) | 19,390) | 21,495) | 18,870) | 11,551) | |
| Shareholders’ equity | 23,677) | 23,765) | 21,081) | 20,994) | 12,948) | 7,633) | |
| Solvency Ratio | |||||||
| Debt to equity (including operating lease liability)1 | 0.76 | 0.77 | 0.92 | 1.02 | 1.46 | 1.51 | |
| Benchmarks | |||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||
| Abbott Laboratories | 0.54 | — | — | — | — | — | |
| Elevance Health Inc. | 0.67 | — | — | — | — | — | |
| Intuitive Surgical Inc. | 0.01 | — | — | — | — | — | |
| Medtronic PLC | 0.53 | — | — | — | — | — | |
| UnitedHealth Group Inc. | 0.70 | — | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | |||||||
| Health Care Equipment & Services | 0.58 | — | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | |||||||
| Health Care | 0.83 | — | — | — | — | — | |
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 2021 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= 18,080 ÷ 23,677 = 0.76
2 Click competitor name to see calculations.
The solvency profile exhibits a significant improvement over the six-year period from 2016 to 2021. A consistent downward trajectory in the debt-to-equity ratio indicates a strategic shift toward a more conservative capital structure and reduced financial leverage.
- Total Debt Trends
- Total debt, including operating lease liabilities, experienced a sharp escalation between 2016 and 2018, rising from US$ 11,551 million to a peak of US$ 21,495 million. Following this peak, a sustained reduction is observed, with debt levels declining steadily to US$ 18,080 million by September 30, 2021.
- Shareholders' Equity Growth
- Equity demonstrated robust and consistent growth throughout the analyzed period. Shareholders' equity increased from US$ 7,633 million in 2016 to US$ 23,677 million in 2021. The most rapid expansion occurred between 2016 and 2018, which served to substantially strengthen the equity base relative to total obligations.
- Debt-to-Equity Ratio Analysis
- The debt-to-equity ratio declined monotonically from 1.51 in 2016 to 0.76 in 2021. This improvement was driven by the dual effect of expanding the equity base and reducing total debt. The transition from a ratio exceeding 1.0 to one significantly below 1.0 indicates that the company has shifted from a debt-heavy financing model to one where equity exceeds total debt and operating lease liabilities.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Debt to Capital
Becton, Dickinson & Co., debt to capital 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) | |||||||
| 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) | |
| Total debt | 17,610) | 17,931) | 19,390) | 21,495) | 18,870) | 11,551) | |
| Shareholders’ equity | 23,677) | 23,765) | 21,081) | 20,994) | 12,948) | 7,633) | |
| Total capital | 41,287) | 41,696) | 40,471) | 42,489) | 31,818) | 19,184) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.43 | 0.43 | 0.48 | 0.51 | 0.59 | 0.60 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Abbott Laboratories | 0.34 | — | — | — | — | — | |
| Elevance Health Inc. | 0.39 | — | — | — | — | — | |
| Intuitive Surgical Inc. | 0.00 | — | — | — | — | — | |
| Medtronic PLC | 0.34 | — | — | — | — | — | |
| UnitedHealth Group Inc. | 0.39 | — | — | — | — | — | |
| Debt to Capital, Sector | |||||||
| Health Care Equipment & Services | 0.35 | — | — | — | — | — | |
| Debt to Capital, Industry | |||||||
| Health Care | 0.44 | — | — | — | — | — | |
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 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= 17,610 ÷ 41,287 = 0.43
2 Click competitor name to see calculations.
An evaluation of the solvency position from 2016 to 2021 reveals a progressive reduction in financial leverage. The capital structure has evolved to become less dependent on borrowed funds, thereby enhancing the long-term financial stability of the organization.
- Total Debt Trends
- Total debt experienced a period of significant growth between 2016 and 2018, rising from 11,551 million US$ to a peak of 21,495 million US$. Following this peak, a consistent downward trajectory was observed, with debt levels decreasing to 17,610 million US$ by September 30, 2021.
- Total Capital Trends
- Total capital saw a rapid expansion in the early part of the analyzed period, increasing from 19,184 million US$ in 2016 to 42,489 million US$ in 2018. Subsequent to this growth phase, the total capital base stabilized, remaining within the range of 40,471 million US$ to 41,696 million US$ between 2019 and 2021.
- Debt to Capital Ratio Analysis
- The debt to capital ratio exhibited a continuous decline over the six-year period. Starting at 0.60 in 2016, the ratio decreased to 0.51 by 2018 and further declined to reach 0.43 by September 30, 2020, remaining at this level through 2021. This trend indicates a systematic reduction in the proportion of debt relative to total capital, reflecting a more conservative approach to solvency.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Debt to Capital (including Operating Lease Liability)
Becton, Dickinson & Co., debt to capital (including operating lease liability) 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) | |||||||
| 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) | |
| Total debt | 17,610) | 17,931) | 19,390) | 21,495) | 18,870) | 11,551) | |
| Current operating lease liabilities (recorded in Accrued expenses) | 126) | 106) | —) | —) | —) | —) | |
| Non-current operating lease liabilities (recorded in Deferred income taxes and other liabilities) | 344) | 336) | —) | —) | —) | —) | |
| Total debt (including operating lease liability) | 18,080) | 18,373) | 19,390) | 21,495) | 18,870) | 11,551) | |
| Shareholders’ equity | 23,677) | 23,765) | 21,081) | 20,994) | 12,948) | 7,633) | |
| Total capital (including operating lease liability) | 41,757) | 42,138) | 40,471) | 42,489) | 31,818) | 19,184) | |
| Solvency Ratio | |||||||
| Debt to capital (including operating lease liability)1 | 0.43 | 0.44 | 0.48 | 0.51 | 0.59 | 0.60 | |
| Benchmarks | |||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||
| Abbott Laboratories | 0.35 | — | — | — | — | — | |
| Elevance Health Inc. | 0.40 | — | — | — | — | — | |
| Intuitive Surgical Inc. | 0.01 | — | — | — | — | — | |
| Medtronic PLC | 0.35 | — | — | — | — | — | |
| UnitedHealth Group Inc. | 0.41 | — | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | |||||||
| Health Care Equipment & Services | 0.37 | — | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | |||||||
| Health Care | 0.45 | — | — | — | — | — | |
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 2021 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 18,080 ÷ 41,757 = 0.43
2 Click competitor name to see calculations.
An analysis of the solvency metrics from 2016 to 2021 reveals a consistent strengthening of the capital structure, characterized by a steady reduction in the reliance on debt relative to total capital.
- Total Debt Trajectory
- Total debt, including operating lease liabilities, experienced a significant increase between 2016 and 2018, rising from 11,551 million US$ to a peak of 21,495 million US$. Following this peak, a sustained downward trend occurred, with debt levels receding to 18,080 million US$ by September 30, 2021.
- Total Capital Evolution
- Total capital expanded rapidly during the initial period of analysis, increasing from 19,184 million US$ in 2016 to a high of 42,489 million US$ in 2018. Between 2019 and 2021, the total capital base remained relatively stable, fluctuating slightly to settle at 41,757 million US$.
- Debt to Capital Ratio Analysis
- The debt to capital ratio exhibits a continuous decline over the six-year period. Starting at 0.60 in 2016, the ratio decreased annually, reaching 0.43 by 2021. This downward progression indicates that the growth in equity or other non-debt capital components has outpaced the growth of debt, particularly after 2018, resulting in a lower leverage profile and improved long-term solvency.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Debt to Assets
Becton, Dickinson & Co., debt to assets calculation, comparison to benchmarks
| Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| 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) | |
| Total debt | 17,610) | 17,931) | 19,390) | 21,495) | 18,870) | 11,551) | |
| Total assets | 53,866) | 54,012) | 51,765) | 53,904) | 37,734) | 25,586) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.33 | 0.33 | 0.37 | 0.40 | 0.50 | 0.45 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Abbott Laboratories | 0.24 | — | — | — | — | — | |
| Elevance Health Inc. | 0.24 | — | — | — | — | — | |
| Intuitive Surgical Inc. | 0.00 | — | — | — | — | — | |
| Medtronic PLC | 0.28 | — | — | — | — | — | |
| UnitedHealth Group Inc. | 0.22 | — | — | — | — | — | |
| Debt to Assets, Sector | |||||||
| Health Care Equipment & Services | 0.23 | — | — | — | — | — | |
| Debt to Assets, Industry | |||||||
| Health Care | 0.30 | — | — | — | — | — | |
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 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= 17,610 ÷ 53,866 = 0.33
2 Click competitor name to see calculations.
The financial trajectory between 2016 and 2021 indicates a strategic transition from a period of aggressive balance sheet expansion to a phase of solvency optimization and stabilization.
- Total Debt Trends
- A significant increase in leverage was observed between 2016 and 2018, with total debt rising from US$ 11,551 million to a peak of US$ 21,495 million. Following this period, a consistent downward trend emerged, with debt levels receding to US$ 17,610 million by September 30, 2021, reflecting a sustained effort toward deleveraging.
- Total Asset Growth
- The asset base underwent rapid expansion from 2016 to 2018, increasing from US$ 25,586 million to US$ 53,904 million. Subsequent years showed a stabilization of total assets, which remained relatively constant, fluctuating between US$ 51,765 million and US$ 54,012 million through 2021.
- Debt to Assets Ratio Analysis
- The solvency ratio peaked at 0.50 in 2017, indicating that half of the company's assets were financed through debt at that time. From 2018 onward, a steady improvement in this ratio is evident, declining from 0.40 to a stable low of 0.33 by 2020 and 2021. This downward trend demonstrates an improved solvency position, as the proportion of assets funded by debt decreased consistently over the latter half of the period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Debt to Assets (including Operating Lease Liability)
Becton, Dickinson & Co., debt to assets (including operating lease liability) 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) | |||||||
| 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) | |
| Total debt | 17,610) | 17,931) | 19,390) | 21,495) | 18,870) | 11,551) | |
| Current operating lease liabilities (recorded in Accrued expenses) | 126) | 106) | —) | —) | —) | —) | |
| Non-current operating lease liabilities (recorded in Deferred income taxes and other liabilities) | 344) | 336) | —) | —) | —) | —) | |
| Total debt (including operating lease liability) | 18,080) | 18,373) | 19,390) | 21,495) | 18,870) | 11,551) | |
| Total assets | 53,866) | 54,012) | 51,765) | 53,904) | 37,734) | 25,586) | |
| Solvency Ratio | |||||||
| Debt to assets (including operating lease liability)1 | 0.34 | 0.34 | 0.37 | 0.40 | 0.50 | 0.45 | |
| Benchmarks | |||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||
| Abbott Laboratories | 0.26 | — | — | — | — | — | |
| Elevance Health Inc. | 0.25 | — | — | — | — | — | |
| Intuitive Surgical Inc. | 0.01 | — | — | — | — | — | |
| Medtronic PLC | 0.29 | — | — | — | — | — | |
| UnitedHealth Group Inc. | 0.24 | — | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | |||||||
| Health Care Equipment & Services | 0.25 | — | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | |||||||
| Health Care | 0.31 | — | — | — | — | — | |
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 2021 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 18,080 ÷ 53,866 = 0.34
2 Click competitor name to see calculations.
The solvency profile of the organization demonstrates a significant shift in capital structure and leverage between 2016 and 2021. While both total debt and total assets experienced substantial growth in the early part of the period, the latter half is characterized by a disciplined reduction in leverage and a stabilization of the asset base.
- Debt to Assets Ratio Trend
- The debt to assets ratio exhibited an initial increase, peaking at 0.50 in 2017. Following this peak, a consistent downward trajectory was observed, with the ratio declining to 0.40 in 2018, 0.37 in 2019, and eventually stabilizing at 0.34 in both 2020 and 2021. This trend indicates a progressive improvement in the organization's solvency position and a reduced reliance on borrowed funds to finance its asset base.
- Total Asset Expansion
- A period of rapid asset growth occurred between 2016 and 2018, where total assets increased from 25,586 million US$ to a peak of 53,904 million US$. After 2018, asset levels remained relatively stable, fluctuating within a narrow range between 51,765 million US$ and 54,012 million US$, suggesting a transition from an aggressive expansion phase to a maintenance phase.
- Debt Dynamics
- Total debt, including operating lease liabilities, rose sharply from 11,551 million US$ in 2016 to a maximum of 21,495 million US$ in 2018. From 2019 onward, a steady deleveraging process is evident, as total debt decreased annually to reach 18,080 million US$ by September 30, 2021. This reduction in total liabilities, occurring alongside stable asset levels, served as the primary driver for the improvement in the solvency ratio.
In summary, the financial data reveals a strategic pivot. The sharp increase in assets and debt through 2018 suggests a period of significant investment or acquisition. This was followed by a four-year period of debt reduction and asset stabilization, resulting in a more conservative and strengthened solvency position by the end of the analyzed period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Financial Leverage
Becton, Dickinson & Co., financial leverage 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) | |||||||
| Total assets | 53,866) | 54,012) | 51,765) | 53,904) | 37,734) | 25,586) | |
| Shareholders’ equity | 23,677) | 23,765) | 21,081) | 20,994) | 12,948) | 7,633) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 2.28 | 2.27 | 2.46 | 2.57 | 2.91 | 3.35 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Abbott Laboratories | 2.10 | — | — | — | — | — | |
| Elevance Health Inc. | 2.70 | — | — | — | — | — | |
| Intuitive Surgical Inc. | 1.14 | — | — | — | — | — | |
| Medtronic PLC | 1.81 | — | — | — | — | — | |
| UnitedHealth Group Inc. | 2.96 | — | — | — | — | — | |
| Financial Leverage, Sector | |||||||
| Health Care Equipment & Services | 2.37 | — | — | — | — | — | |
| Financial Leverage, Industry | |||||||
| Health Care | 2.69 | — | — | — | — | — | |
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 2021 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 53,866 ÷ 23,677 = 2.28
2 Click competitor name to see calculations.
Between September 30, 2016, and September 30, 2021, a consistent reduction in financial leverage was observed, indicating a strategic shift toward a more conservative capital structure. The company significantly reduced its reliance on debt to finance its assets, thereby improving its overall solvency profile over the six-year period.
- Total Asset Trends
- Total assets experienced rapid expansion between 2016 and 2018, rising from US$ 25,586 million to US$ 53,904 million. Following this period of growth, asset levels remained relatively stable, fluctuating between US$ 51,765 million and US$ 54,012 million from 2019 through 2021.
- Shareholders' Equity Progression
- Shareholders' equity demonstrated a strong and sustained upward trajectory, increasing from US$ 7,633 million in 2016 to US$ 23,677 million by 2021. The most substantial growth occurred during the 2016 to 2018 window, effectively increasing the equity cushion available to support the company's asset base.
- Financial Leverage Ratio Analysis
- The financial leverage ratio exhibited a steady decline from 3.35 in 2016 to 2.28 in 2021. This downward trend signifies a reduction in the multiplier effect of debt on equity, with the ratio reaching a low of 2.27 in 2020. The convergence of increasing equity and stabilizing assets resulted in a strengthened balance sheet with lower financial risk.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Interest Coverage
Becton, Dickinson & Co., interest coverage 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) | |||||||
| Net income | 2,092) | 874) | 1,233) | 311) | 1,100) | 976) | |
| Add: Income tax expense | 150) | 111) | (57) | 862) | (124) | 98) | |
| Add: Interest expense | 469) | 528) | 639) | 706) | 521) | 388) | |
| Earnings before interest and tax (EBIT) | 2,711) | 1,513) | 1,815) | 1,879) | 1,497) | 1,462) | |
| Solvency Ratio | |||||||
| Interest coverage1 | 5.78 | 2.87 | 2.84 | 2.66 | 2.87 | 3.77 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Abbott Laboratories | 16.41 | — | — | — | — | — | |
| Elevance Health Inc. | 10.93 | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | 5.21 | — | — | — | — | — | |
| UnitedHealth Group Inc. | 14.44 | — | — | — | — | — | |
| Interest Coverage, Sector | |||||||
| Health Care Equipment & Services | 12.30 | — | — | — | — | — | |
| Interest Coverage, Industry | |||||||
| Health Care | 14.14 | — | — | — | — | — | |
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 2021 Calculation
Interest coverage = EBIT ÷ Interest expense
= 2,711 ÷ 469 = 5.78
2 Click competitor name to see calculations.
The analysis of the interest coverage ratio over the six-year period ending September 30, 2021, reveals a period of initial decline, a phase of stabilization, and a final significant improvement in solvency capacity.
- Interest Coverage Ratio Trends
- The interest coverage ratio experienced a downward trend between 2016 and 2018, falling from 3.77 to a low of 2.66. This decline was primarily driven by a substantial increase in interest expenses, which rose from 388 million US$ in 2016 to a peak of 706 million US$ in 2018, outpacing the growth in earnings before interest and tax (EBIT) during that same interval.
- A period of relative stability occurred between 2019 and 2020, with the ratio remaining consistent between 2.84 and 2.87. This plateau coincided with a simultaneous reduction in both EBIT and interest expenses, maintaining a steady margin of safety for debt service.
- A sharp increase in the coverage ratio is observed in 2021, reaching a peak of 5.78. This improvement represents the strongest solvency position in the analyzed period, resulting from a dual positive impact: EBIT reached its highest level at 2,711 million US$, while interest expenses declined to 469 million US$.
- Earnings and Expense Correlation
- The volatility in the coverage ratio is closely linked to the trajectory of interest expenses. The peak expense level in 2018 created the most constrained coverage position. Conversely, the optimization of interest costs in 2021, combined with an EBIT increase of approximately 79% compared to the previous year, led to a rapid expansion of the company's ability to meet its interest obligations.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Fixed Charge Coverage
Becton, Dickinson & Co., fixed charge coverage calculation, comparison to benchmarks
| Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | ||
|---|---|---|---|---|---|---|---|
| Federal statutory tax rate | 21.00% | 21.00% | 21.00% | 24.50% | 35.00% | 35.00% | |
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 2,092) | 874) | 1,233) | 311) | 1,100) | 976) | |
| Add: Income tax expense | 150) | 111) | (57) | 862) | (124) | 98) | |
| Add: Interest expense | 469) | 528) | 639) | 706) | 521) | 388) | |
| Earnings before interest and tax (EBIT) | 2,711) | 1,513) | 1,815) | 1,879) | 1,497) | 1,462) | |
| Add: Operating lease cost | 132) | 131) | 169) | 149) | 110) | 112) | |
| Earnings before fixed charges and tax | 2,843) | 1,644) | 1,984) | 2,028) | 1,607) | 1,574) | |
| Interest expense | 469) | 528) | 639) | 706) | 521) | 388) | |
| Operating lease cost | 132) | 131) | 169) | 149) | 110) | 112) | |
| Preferred stock dividends | 90) | 107) | 151) | 152) | 70) | —) | |
| Preferred stock dividends, tax adjustment1 | 24) | 28) | 40) | 49) | 38) | —) | |
| Preferred stock dividends, after tax adjustment | 114) | 135) | 191) | 201) | 108) | —) | |
| Fixed charges | 715) | 794) | 999) | 1,056) | 739) | 500) | |
| Solvency Ratio | |||||||
| Fixed charge coverage2 | 3.98 | 2.07 | 1.99 | 1.92 | 2.18 | 3.15 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors3 | |||||||
| Abbott Laboratories | 10.21 | — | — | — | — | — | |
| Elevance Health Inc. | 8.48 | — | — | — | — | — | |
| Intuitive Surgical Inc. | 93.66 | — | — | — | — | — | |
| Medtronic PLC | 4.31 | — | — | — | — | — | |
| UnitedHealth Group Inc. | 8.80 | — | — | — | — | — | |
| Fixed Charge Coverage, Sector | |||||||
| Health Care Equipment & Services | 8.36 | — | — | — | — | — | |
| Fixed Charge Coverage, Industry | |||||||
| Health Care | 10.48 | — | — | — | — | — | |
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 2021 Calculation
Preferred stock dividends, tax adjustment = (Preferred stock dividends × Federal statutory tax rate) ÷ (1 − Federal statutory tax rate)
= (90 × 21.00%) ÷ (1 − 21.00%) = 24
2 2021 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 2,843 ÷ 715 = 3.98
3 Click competitor name to see calculations.
The solvency profile from 2016 to 2021 is characterized by a period of tightening coverage followed by a significant recovery. The fixed charge coverage ratio experienced an initial decline, reaching its lowest point in 2018, before rebounding strongly by the end of the observed period.
- Earnings before fixed charges and tax
- Earnings exhibited a general upward trajectory over the six-year span, despite a moderate dip in 2020. A substantial surge is observed in 2021, with earnings reaching 2,843 million USD, a significant increase from the 1,574 million USD reported in 2016.
- Fixed charges
- Fixed obligations underwent a period of rapid escalation between 2016 and 2018, increasing from 500 million USD to a peak of 1,056 million USD. Subsequent to 2018, a consistent downward trend is evident, with fixed charges decreasing annually to reach 715 million USD by 2021.
- Fixed charge coverage ratio
- The coverage ratio declined from 3.15 in 2016 to 1.92 in 2018, as the growth in fixed charges outpaced the growth in earnings. A recovery phase began in 2019, culminating in a peak ratio of 3.98 in 2021. This improvement indicates a strengthened ability to meet fixed financial obligations, driven by the convergence of record-high earnings and reduced fixed costs.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?