Stock Analysis on Net

Bristol-Myers Squibb Co. (NYSE:BMY)

Financial Reporting Quality: Aggregate Accruals

Microsoft Excel

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
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Operating Assets
Total assets 95,159 96,820 109,314 118,481 129,944
Less: Cash and cash equivalents 11,464 9,123 13,979 14,546 12,346
Less: Marketable debt securities 816 130 2,987 1,285 3,047
Operating assets 82,879 87,567 92,348 102,650 114,551
Operating Liabilities
Total liabilities 65,674 65,702 73,308 80,599 78,246
Less: Short-term debt obligations 3,119 4,264 4,948 2,340 3,346
Less: Long-term debt, excluding current portion 36,653 35,056 39,605 48,336 43,387
Operating liabilities 25,902 26,382 28,755 29,923 31,513
 
Net operating assets1 56,977 61,185 63,593 72,727 83,038
Balance-sheet-based aggregate accruals2 (4,208) (2,408) (9,134) (10,311)
Financial Ratio
Balance-sheet-based accruals ratio3 -7.12% -3.86% -13.40% -13.24%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
AbbVie Inc. -22.39% -14.27% -9.69% 131.82%
Amgen Inc. 57.08% 4.07% 0.70% 3.47%
Eli Lilly & Co. 28.84% 11.38% 16.60% 18.42%
Gilead Sciences Inc. 1.04% -2.92% -2.34% 59.36%
Johnson & Johnson -21.13% 19.84% 3.75% 7.76%
Merck & Co. Inc. 3.16% 0.46% 25.14% 15.90%
Pfizer Inc. 30.66% 24.95% -7.11% -14.91%
Regeneron Pharmaceuticals Inc. 1.17% 11.07% 43.54% 16.50%
Thermo Fisher Scientific Inc. 4.97% -1.78% 43.38% 1.98%
Vertex Pharmaceuticals Inc. 61.24% 14.07% 18.20% -8.97%
Balance-Sheet-Based Accruals Ratio, Sector
Pharmaceuticals, Biotechnology & Life Sciences 7.77% 5.56% 5.06% 17.61%
Balance-Sheet-Based Accruals Ratio, Industry
Health Care 8.00% 2.36% 5.50% 10.57%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Net operating assets = Operating assets – Operating liabilities
= 82,87925,902 = 56,977

2 2023 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2023 – Net operating assets2022
= 56,97761,185 = -4,208

3 2023 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -4,208 ÷ [(56,977 + 61,185) ÷ 2] = -7.12%

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 2022 to 2023.

Cash-Flow-Statement-Based Accruals Ratio

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

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net earnings (loss) attributable to BMS 8,025 6,327 6,994 (9,015) 3,439
Less: Net cash provided by operating activities 13,860 13,066 16,207 14,052 8,067
Less: Net cash used in investing activities (2,295) (1,062) (538) (10,859) (9,770)
Cash-flow-statement-based aggregate accruals (3,540) (5,677) (8,675) (12,208) 5,142
Financial Ratio
Cash-flow-statement-based accruals ratio1 -5.99% -9.10% -12.73% -15.67%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
AbbVie Inc. -24.89% -16.25% -10.28% 44.98%
Amgen Inc. 52.47% 8.81% -12.87% 6.95%
Eli Lilly & Co. 28.13% 10.32% 5.30% 11.38%
Gilead Sciences Inc. -0.19% -4.95% -4.86% 20.18%
Johnson & Johnson 13.66% 10.78% 8.23% 17.00%
Merck & Co. Inc. 2.23% 0.61% 29.09% 13.75%
Pfizer Inc. 19.96% 18.46% 13.18% 3.27%
Regeneron Pharmaceuticals Inc. 14.35% 18.61% 49.24% 10.32%
Thermo Fisher Scientific Inc. 3.80% -0.06% 34.69% -0.89%
Vertex Pharmaceuticals Inc. 62.03% -14.45% 1.38% -23.47%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Pharmaceuticals, Biotechnology & Life Sciences 9.84% 2.64% 7.05% 9.16%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Health Care 8.56% 2.29% 6.44% 6.57%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -3,540 ÷ [(56,977 + 61,185) ÷ 2] = -5.99%

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 2022 to 2023.