Becton, Dickinson & Co., FCFF 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)
Net noncash charges	2,253)	2,552)	2,468)	1,657)	1,821)	1,184)
Change in operating assets and liabilities	302)	113)	(371)	897)	(371)	399)
Net cash provided by operating activities	4,647)	3,539)	3,330)	2,865)	2,550)	2,559)
Interest paid, net of amounts capitalized, net of tax¹	442)	457)	520)	547)	283)	356)
Capitalized interest, net of tax²	40)	38)	35)	34)	21)	27)
Capital expenditures	(1,231)	(810)	(957)	(895)	(727)	(693)
Free cash flow to the firm (FCFF)	3,898)	3,224)	2,928)	2,551)	2,127)	2,250)

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, 2} See details »

Operating Cash Flow Trend: Net cash provided by operating activities showed a general upward trend from 2016 to 2021. Starting at 2,559 million US dollars in 2016, the figure remained relatively stable through 2017, then increased steadily each year, reaching a peak of 4,647 million US dollars in 2021. This represents a significant increase in cash generation capacity by the company over the six-year period.
Free Cash Flow to the Firm (FCFF) Pattern: Free cash flow to the firm also exhibited consistent growth during the same period. Beginning at 2,250 million US dollars in 2016 and experiencing a slight dip in 2017, FCFF increased annually thereafter. By 2021, free cash flow reached 3,898 million US dollars, representing a substantial rise indicative of improved financial flexibility and potential for investment or debt reduction.
Relationship Between Operating Cash Flow and FCFF: The data indicates that free cash flow to the firm consistently remained slightly lower than net cash provided by operating activities, which is expected as FCFF typically accounts for capital expenditures among other adjustments. Both metrics moved broadly in parallel, confirming that increased operating cash inflows translated effectively into higher free cash availability.
Overall Financial Implications: The upward trends in both operating cash flow and free cash flow suggest strengthening operational efficiency and enhanced liquidity. The growing free cash flow particularly points to a solid foundation for future investments, debt servicing, or shareholder returns. No visible declines or volatility were observed, indicating stable and improving financial performance in terms of cash generation over the period analyzed.

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Becton, Dickinson & Co., interest paid, net of tax 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
Effective Income Tax Rate (EITR)
EITR¹	6.70%	11.30%	21.00%	18.90%	35.00%	9.10%
Interest Paid, Net of Tax
Interest paid, net of amounts capitalized, before tax	474)	515)	658)	674)	435)	392)
Less: Interest paid, net of amounts capitalized, tax²	32)	58)	138)	127)	152)	36)
Interest paid, net of amounts capitalized, net of tax	442)	457)	520)	547)	283)	356)
Interest Costs Capitalized, Net of Tax
Capitalized interest, before tax	43)	43)	44)	42)	32)	30)
Less: Capitalized interest, tax³	3)	5)	9)	8)	11)	3)
Capitalized interest, net of tax	40)	38)	35)	34)	21)	27)

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 See details »

² 2021 Calculation
Interest paid, net of amounts capitalized, tax = Interest paid, net of amounts capitalized × EITR
= 474 × 6.70% = 32

³ 2021 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= 43 × 6.70% = 3

Effective Income Tax Rate (EITR): The effective income tax rate exhibits significant fluctuation over the analyzed period from 2016 to 2021. It starts at a low rate of 9.1% in 2016, sharply increases to 35% in 2017, then declines to 18.9% in 2018. Subsequently, the rate rises again to 21% in 2019 before decreasing substantially over the next two years, reaching 11.3% in 2020 and further dropping to 6.7% in 2021. The trend indicates notable volatility with an overall downward trajectory in recent years.
Interest Paid, Net of Amounts Capitalized, Net of Tax (US$ in millions): Interest paid, net of capitalized amounts and tax, shows a varying pattern. Beginning at $356 million in 2016, it declines to $283 million in 2017, then sharply increases to $547 million in 2018. After reaching this peak, interest paid slightly decreases to $520 million in 2019, then continues a gradual downward trend to $457 million in 2020 and $442 million in 2021. The data suggest a peak in 2018, followed by moderate reductions in subsequent years.
Capitalized Interest, Net of Tax (US$ in millions): Capitalized interest, net of tax, shows a generally increasing trend over the period. Starting from $27 million in 2016, the amount declines slightly to $21 million in 2017, then increases steadily each year, reaching $34 million in 2018, $35 million in 2019, $38 million in 2020, and $40 million in 2021. This indicates a consistent rise in capitalized interest costs net of tax after 2017.

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Becton, Dickinson & Co., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	89,222)
Free cash flow to the firm (FCFF)	3,898)
Valuation Ratio
EV/FCFF	22.89
Benchmarks
EV/FCFF, Competitors¹
Abbott Laboratories	35.19
CVS Health Corp.	16.57
Elevance Health Inc.	13.71
Intuitive Surgical Inc.	146.67
Medtronic PLC	22.86
UnitedHealth Group Inc.	14.22
EV/FCFF, Sector
Health Care Equipment & Services	16.81
EV/FCFF, Industry
Health Care	18.30

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

¹ Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

Becton, Dickinson & Co., historical EV/FCFF 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)
Enterprise value (EV)¹	84,640)	80,969)	89,200)	85,173)	55,792)	45,755)
Free cash flow to the firm (FCFF)²	3,898)	3,224)	2,928)	2,551)	2,127)	2,250)
Valuation Ratio
EV/FCFF³	21.71	25.12	30.47	33.39	26.24	20.34
Benchmarks
EV/FCFF, Competitors⁴
Abbott Laboratories	23.47	36.94	—	—	—	—
CVS Health Corp.	10.30	9.42	—	—	—	—
Elevance Health Inc.	12.74	6.04	—	—	—	—
Intuitive Surgical Inc.	56.01	76.70	—	—	—	—
Medtronic PLC	33.84	21.43	—	—	—	—
UnitedHealth Group Inc.	22.21	15.82	—	—	—	—
EV/FCFF, Sector
Health Care Equipment & Services	19.79	16.36	—	—	—	—
EV/FCFF, Industry
Health Care	17.18	18.55	—	—	—	—

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 See details »

² See details »

³ 2021 Calculation
EV/FCFF = EV ÷ FCFF
= 84,640 ÷ 3,898 = 21.71

⁴ Click competitor name to see calculations.

The analysis of the financial data over the six-year period reveals several notable trends and patterns concerning enterprise value (EV), free cash flow to the firm (FCFF), and their ratio (EV/FCFF).

Enterprise Value (EV): The enterprise value shows an overall growth trend from 2016 through 2019, rising from approximately $45.8 billion to about $89.2 billion. This represents a near doubling over this initial period. However, the value decreased notably in 2020 to roughly $81.0 billion, potentially reflecting external market or operational impacts during that year. Subsequently, it showed a modest recovery in 2021, increasing to approximately $84.6 billion, though still below the 2019 peak.
Free Cash Flow to the Firm (FCFF): Free cash flow to the firm exhibits a robust and consistent upward trajectory throughout the entire period. Starting at approximately $2.25 billion in 2016, the FCFF steadily increased each year, reaching about $3.9 billion in 2021. This growth suggests improving operational efficiency or increased cash generation capability over time, with the most significant increments occurring in the latter years.
EV to FCFF Ratio (EV/FCFF): The EV/FCFF ratio, representing the valuation multiple relative to free cash flow, shows a rising trend from 20.34 in 2016 to a peak of 33.39 in 2018. This increase indicates that the company's enterprise value grew at a faster rate than free cash flow during those years, possibly reflecting optimistic market valuation or expectations. Following the 2018 peak, the ratio declined steadily to 21.71 by 2021, implying either a normalization or a revaluation where the increase in free cash flow outpaced enterprise value growth, potentially signaling improved value generation relative to price.

Overall, the data indicates a company that increased its operational cash generation consistently, although its market valuation experienced more volatility, with a peak before 2019 followed by a correction and moderate recovery. The decreasing EV/FCFF ratio after 2018 suggests enhanced cash flow performance relative to its valuation, which could be interpreted as a positive sign of underlying financial strength or market adjustment to more sustainable valuations.

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Becton, Dickinson & Co. (NYSE:BDX)

Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)

Interest Paid, Net of Tax

Enterprise Value to FCFF Ratio, Current

Enterprise Value to FCFF Ratio, Historical