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, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Operating Assets
Total assets 118,481  129,944  34,986  33,551  33,707 
Less: Cash and cash equivalents 14,546  12,346  6,911  5,421  4,237 
Less: Marketable debt securities 1,285  3,047  1,973  1,391  2,113 
Operating assets 102,650  114,551  26,102  26,739  27,357 
Operating Liabilities
Total liabilities 80,599  78,246  20,859  21,704  17,360 
Less: Short-term debt obligations 2,340  3,346  1,703  987  992 
Less: Long-term debt, excluding current portion 48,336  43,387  5,646  6,975  5,716 
Operating liabilities 29,923  31,513  13,510  13,742  10,652 
 
Net operating assets1 72,727  83,038  12,592  12,997  16,705 
Balance-sheet-based aggregate accruals2 (10,311) 70,446  (405) (3,708) — 
Financial Ratio
Balance-sheet-based accruals ratio3 -13.24% 147.33% -3.17% -24.97%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Abbott Laboratories -1.55% -1.97% -6.71% 69.42%
Anthem Inc. -15.16% 2.15% 15.94% 18.66%
Becton, Dickinson & Co. -2.78% -3.42% 80.26% 0.01%
CVS Health Corp. -0.89% -0.64% 66.39% 3.20%
Danaher Corp. 52.50% -14.67% 2.50% 5.32%
Edwards Lifesciences Corp. 15.47% 14.93% 4.51% 20.10%
HCA Healthcare Inc. -1.34% 10.12% 7.30% 8.52%
Intuitive Surgical Inc. -8.55% 33.12% 26.86% -15.26%
Medtronic PLC -1.48% 0.51% -7.08% -0.74%
Stryker Corp. 21.04% 8.47% 21.55% 9.67%
UnitedHealth Group Inc. 5.27% 12.54% 14.66% 13.69%
Balance-Sheet-Based Accruals Ratio, Sector
Health Care Equipment & Services 2.44% 15.28% 22.92% 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Health Care 11.02% 12.66% 7.34% 200.00%

Based on: 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), 10-K (reporting date: 2016-12-31).

1 2020 Calculation
Net operating assets = Operating assets – Operating liabilities
= 102,65029,923 = 72,727

2 2020 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2020 – Net operating assets2019
= 72,72783,038 = -10,311

3 2020 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -10,311 ÷ [(72,727 + 83,038) ÷ 2] = -13.24%

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. improved earnings quality from 2019 to 2020.

Cash-Flow-Statement-Based Accruals Ratio

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

US$ in millions

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net earnings (loss) attributable to BMS (9,015) 3,439  4,920  1,007  4,457 
Less: Net cash provided by operating activities 14,052  8,067  5,940  5,275  2,850 
Less: Net cash (used in) provided by investing activities (10,859) (9,770) (874) (66) 1,480 
Cash-flow-statement-based aggregate accruals (12,208) 5,142  (146) (4,202) 127 
Financial Ratio
Cash-flow-statement-based accruals ratio1 -15.67% 10.75% -1.14% -28.29%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Abbott Laboratories -2.65% -1.39% -5.39% 12.34%
Anthem Inc. 4.96% 5.94% 4.98% 23.72%
Becton, Dickinson & Co. -3.65% -3.34% 45.11% -3.22%
CVS Health Corp. -2.54% -2.30% 35.93% 2.50%
Danaher Corp. 42.90% 1.49% 4.30% -0.40%
Edwards Lifesciences Corp. 8.59% 15.43% -10.36% 9.54%
HCA Healthcare Inc. -6.45% 5.24% 3.27% 4.08%
Intuitive Surgical Inc. 10.64% 21.54% 31.54% -28.80%
Medtronic PLC 1.16% -2.45% -10.98% -1.82%
Stryker Corp. 13.89% 7.21% 23.53% 7.81%
UnitedHealth Group Inc. 6.56% 10.03% 12.32% 9.12%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Health Care Equipment & Services 1.79% 2.52% 12.43% 6.10%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Health Care 6.78% 2.57% -1.27% 3.56%

Based on: 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), 10-K (reporting date: 2016-12-31).

1 2020 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -12,208 ÷ [(72,727 + 83,038) ÷ 2] = -15.67%

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. deteriorated earnings quality from 2019 to 2020.