Stock Analysis on Net

Bristol-Myers Squibb Co. (NYSE:BMY)

Financial Reporting Quality: Aggregate Accruals 

Microsoft Excel LibreOffice Calc

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

Bristol-Myers Squibb Co., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Operating Assets
Total assets 109,314  118,481  129,944  34,986  33,551 
Less: Cash and cash equivalents 13,979  14,546  12,346  6,911  5,421 
Less: Marketable debt securities 2,987  1,285  3,047  1,973  1,391 
Operating assets 92,348  102,650  114,551  26,102  26,739 
Operating Liabilities
Total liabilities 73,308  80,599  78,246  20,859  21,704 
Less: Short-term debt obligations 4,948  2,340  3,346  1,703  987 
Less: Long-term debt, excluding current portion 39,605  48,336  43,387  5,646  6,975 
Operating liabilities 28,755  29,923  31,513  13,510  13,742 
 
Net operating assets1 63,593  72,727  83,038  12,592  12,997 
Balance-sheet-based aggregate accruals2 (9,134) (10,311) 70,446  (405) — 
Financial Ratio
Balance-sheet-based accruals ratio3 -13.40% -13.24% 147.33% -3.17%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Abbott Laboratories -1.76% -1.55% -1.97% -6.71%
CVS Health Corp. -3.68% -0.89% -0.64% 66.39%
Danaher Corp. 16.41% 52.50% -14.67% 2.50%
Elevance Health Inc. 14.93% -15.16% 2.15% 15.94%
Intuitive Surgical Inc. 50.02% -8.55% 33.12% 26.86%
Medtronic PLC 3.72% -1.48% 0.51% -7.08%
UnitedHealth Group Inc. 4.32% 5.27% 12.54% 14.66%
Balance-Sheet-Based Accruals Ratio, Sector
Health Care Equipment & Services 1.79% 2.18% 17.72% 19.63%
Balance-Sheet-Based Accruals Ratio, Industry
Health Care 5.32% 11.90% 13.78% 3.80%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 2021 Calculation
Net operating assets = Operating assets – Operating liabilities
= 92,34828,755 = 63,593

2 2021 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2021 – Net operating assets2020
= 63,59372,727 = -9,134

3 2021 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -9,134 ÷ [(63,593 + 72,727) ÷ 2] = -13.40%

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, Bristol-Myers Squibb Co. deteriorated earnings quality from 2020 to 2021.

Cash-Flow-Statement-Based Accruals Ratio

Bristol-Myers Squibb Co., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net earnings (loss) attributable to BMS 6,994  (9,015) 3,439  4,920  1,007 
Less: Net cash provided by operating activities 16,207  14,052  8,067  5,940  5,275 
Less: Net cash used in investing activities (538) (10,859) (9,770) (874) (66)
Cash-flow-statement-based aggregate accruals (8,675) (12,208) 5,142  (146) (4,202)
Financial Ratio
Cash-flow-statement-based accruals ratio1 -12.73% -15.67% 10.75% -1.14%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Abbott Laboratories -3.29% -2.65% -1.39% -5.39%
CVS Health Corp. -4.20% -2.54% -2.30% 35.93%
Danaher Corp. 18.48% 42.90% 1.49% 4.30%
Elevance Health Inc. 30.34% 4.96% 5.94% 4.98%
Intuitive Surgical Inc. 33.51% 10.64% 21.54% 31.54%
Medtronic PLC 0.35% 1.16% -2.45% -10.98%
UnitedHealth Group Inc. 5.77% 6.56% 10.03% 12.32%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Health Care Equipment & Services 2.25% 2.19% 2.58% 10.13%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Health Care 6.79% 7.59% 2.61% -4.21%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 2021 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -8,675 ÷ [(63,593 + 72,727) ÷ 2] = -12.73%

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, Bristol-Myers Squibb Co. improved earnings quality from 2020 to 2021.