Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Boston Scientific Corp. (NYSE:BSX)

Financial Reporting Quality: Aggregate Accruals

Advanced level

Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

Boston Scientific Corp., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Operating Assets
Total assets 30,777  30,565  20,999  19,042  18,096 
Less: Cash and cash equivalents 1,734  217  146  188  196 
Operating assets 29,043  30,348  20,853  18,854  17,900 
Operating Liabilities
Total liabilities 15,451  16,688  12,273  12,030  11,363 
Less: Current debt obligations 13  1,416  2,253  1,801  64 
Less: Long-term debt 9,130  8,592  4,803  3,815  5,420 
Operating liabilities 6,308  6,680  5,217  6,414  5,879 
 
Net operating assets1 22,735  23,668  15,636  12,440  12,021 
Balance-sheet-based aggregate accruals2 (933) 8,032  3,196  419  — 
Financial Ratio
Balance-sheet-based accruals ratio3 -4.02% 40.87% 22.77% 3.43%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Becton, Dickinson & Co. -2.78% -3.42% 80.26% 0.01% -5.12%
Danaher Corp. 52.50% -14.67% 2.50% 5.32%
Edwards Lifesciences Corp. 15.47% 14.93% 4.51% 20.10%
Intuitive Surgical Inc. -8.55% 33.12% 26.86% -15.26%
Medtronic PLC -1.48% 0.51% -7.08% -0.74% 1.04%
Stryker Corp. 21.04% 8.47% 21.55% 9.67%
Thermo Fisher Scientific Inc. 1.96% 1.24% -1.37% 18.69%
UnitedHealth Group Inc. 6.16% 12.14% 13.95% 13.02%
Balance-Sheet-Based Accruals Ratio, Sector
Health Care Equipment & Services 9.19% 5.11% 12.85% 7.38%
Balance-Sheet-Based Accruals Ratio, Industry
Health Care 13.83% 16.24% -0.89% 9.08%

Based on: 10-K (filing date: 2021-02-23), 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-23).

1 2020 Calculation
Net operating assets = Operating assets – Operating liabilities
= 29,0436,308 = 22,735

2 2020 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2020 – Net operating assets2019
= 22,73523,668 = -933

3 2020 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -933 ÷ [(22,735 + 23,668) ÷ 2] = -4.02%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Boston Scientific Corp. improved earnings quality from 2019 to 2020.

Cash-Flow-Statement-Based Accruals Ratio

Boston Scientific Corp., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net income (loss) (82) 4,700  1,671  104  347 
Less: Cash provided by operating activities 1,508  1,836  310  1,426  972 
Less: Cash used for investing activities (411) (5,041) (1,921) (1,010) (887)
Cash-flow-statement-based aggregate accruals (1,179) 7,905  3,282  (312) 262 
Financial Ratio
Cash-flow-statement-based accruals ratio1 -5.08% 40.22% 23.38% -2.55%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Becton, Dickinson & Co. -3.65% -3.34% 45.11% -3.22% -5.06%
Danaher Corp. 42.90% 1.49% 4.30% -0.40%
Edwards Lifesciences Corp. 8.59% 15.43% -10.36% 9.54%
Intuitive Surgical Inc. 10.64% 21.54% 31.54% -28.80%
Medtronic PLC 1.16% -2.45% -10.98% -1.82% -5.58%
Stryker Corp. 13.89% 7.21% 23.53% 7.81%
Thermo Fisher Scientific Inc. -0.89% 0.47% -0.79% 14.43%
UnitedHealth Group Inc. 6.30% 9.67% 11.81% 8.68%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Health Care Equipment & Services 7.69% 5.24% 8.17% 3.71%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Health Care 8.39% 4.20% -6.12% 0.90%

Based on: 10-K (filing date: 2021-02-23), 10-K (filing date: 2020-02-25), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-23).

1 2020 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -1,179 ÷ [(22,735 + 23,668) ÷ 2] = -5.08%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Boston Scientific Corp. improved earnings quality from 2019 to 2020.