Stock Analysis on Net

Danaher Corp. (NYSE:DHR)

Return on Capital (ROC)

Microsoft Excel LibreOffice Calc

Return on Invested Capital (ROIC)

Danaher Corp., ROIC calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 4,999  2,089  2,614  2,261  1,869 
Invested capital2 67,209  58,367  44,837  42,890  42,551 
Performance Ratio
ROIC3 7.44% 3.58% 5.83% 5.27% 4.39%
Benchmarks
ROIC, Competitors4
Abbott Laboratories 8.01% 6.47% 6.13% 0.03% 3.51%
Anthem Inc. 8.67% 9.75% 8.29% 6.62% 6.65%
Becton, Dickinson & Co. 2.14% 2.44% 1.21% 3.75% 3.22%
Bristol-Myers Squibb Co. -7.57% 3.06% 26.85% 13.23% 25.13%
CVS Health Corp. 6.63% 5.97% 1.67% 8.07% 8.25%
Edwards Lifesciences Corp. 19.51% 28.41% 24.25% 21.54% 21.33%
HCA Healthcare Inc. 16.22% 17.72% 19.73% 15.68% 18.37%
Intuitive Surgical Inc. 25.62% 42.29% 47.50% 45.15% 37.14%
Medtronic PLC 5.86% 7.20% 3.43% 4.57% 4.81%
Stryker Corp. 6.88% 10.09% 10.10% 6.78% 10.11%
UnitedHealth Group Inc. 20.83% 21.12% 19.67% 17.70% 14.19%

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 NOPAT. See details »

2 Invested capital. See details »

3 2020 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 4,999 ÷ 67,209 = 7.44%

4 Click competitor name to see calculations.

Performance ratio Description The company
ROIC A measure of the periodic, after tax, cash-on-cash yield earned in the business. Danaher Corp. ROIC deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level.

Decomposition of ROIC

Danaher Corp., decomposition of ROIC

Microsoft Excel LibreOffice Calc
ROIC = OPM1 × TO2 × 1 – CTR3
Dec 31, 2020 7.44% = 23.49% × 0.34 × 92.94%
Dec 31, 2019 3.58% = 18.77% × 0.31 × 61.87%
Dec 31, 2018 5.83% = 17.49% × 0.44 × 75.01%
Dec 31, 2017 5.27% = 17.28% × 0.43 × 70.86%
Dec 31, 2016 4.39% = 15.91% × 0.40 × 69.16%

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 Operating profit margin (OPM). See calculations »

2 Turnover of capital (TO). See calculations »

3 Effective cash tax rate (CTR). See calculations »

The primary reason for the increase in return on invested capital (ROIC) over 2020 year is the decrease in effective cash tax rate (CTR).


Operating Profit Margin (OPM)

Danaher Corp., OPM calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 4,999  2,089  2,614  2,261  1,869 
Add: Cash operating taxes2 380  1,287  871  930  833 
Net operating profit before taxes (NOPBT) 5,378  3,376  3,485  3,191  2,702 
 
Sales 22,284  17,911  19,893  18,330  16,882 
Add: Increase (decrease) in deferred revenue 611  69  28  138  99 
Adjusted sales 22,895  17,980  19,921  18,468  16,981 
Profitability Ratio
OPM3 23.49% 18.77% 17.49% 17.28% 15.91%
Benchmarks
OPM, Competitors4
Abbott Laboratories 16.05% 14.97% 11.67% 11.07% 12.18%
Anthem Inc. 6.03% 6.47% 6.24% 5.57% 6.19%
Becton, Dickinson & Co. 8.76% 10.50% 11.60% 11.65% 11.73%
Bristol-Myers Squibb Co. -12.65% 21.63% 26.91% 26.03% 31.63%
CVS Health Corp. 4.79% 4.69% 2.59% 5.80% 6.31%
Edwards Lifesciences Corp. 20.81% 26.62% 20.56% 30.33% 25.36%
HCA Healthcare Inc. 13.80% 13.96% 15.39% 14.13% 15.91%
Intuitive Surgical Inc. 28.14% 34.15% 35.50% 36.03% 36.62%
Medtronic PLC 16.84% 21.19% 21.24% 18.06% 18.64%
Stryker Corp. 15.48% 18.35% 18.49% 18.18% 18.74%
UnitedHealth Group Inc. 9.12% 8.37% 7.85% 7.83% 7.13%

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 NOPAT. See details »

2 Cash operating taxes. See details »

3 2020 Calculation
OPM = 100 × NOPBT ÷ Adjusted sales
= 100 × 5,378 ÷ 22,895 = 23.49%

4 Click competitor name to see calculations.

Profitability ratio Description The company
OPM The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. Danaher Corp. OPM improved from 2018 to 2019 and from 2019 to 2020.

Turnover of Capital (TO)

Danaher Corp., TO calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Sales 22,284  17,911  19,893  18,330  16,882 
Add: Increase (decrease) in deferred revenue 611  69  28  138  99 
Adjusted sales 22,895  17,980  19,921  18,468  16,981 
 
Invested capital1 67,209  58,367  44,837  42,890  42,551 
Efficiency Ratio
TO2 0.34 0.31 0.44 0.43 0.40
Benchmarks
TO, Competitors3
Abbott Laboratories 0.57 0.55 0.52 0.42 0.46
Anthem Inc. 2.13 1.86 1.75 1.79 1.87
Becton, Dickinson & Co. 0.37 0.38 0.34 0.35 0.56
Bristol-Myers Squibb Co. 0.47 0.26 1.19 1.26 1.10
CVS Health Corp. 1.96 1.83 1.40 2.19 2.08
Edwards Lifesciences Corp. 1.11 1.18 1.28 1.20 1.14
HCA Healthcare Inc. 1.49 1.53 1.57 1.58 1.63
Intuitive Surgical Inc. 0.98 1.35 1.47 1.86 1.31
Medtronic PLC 0.41 0.42 0.42 0.37 0.37
Stryker Corp. 0.53 0.64 0.65 0.71 0.66
UnitedHealth Group Inc. 2.96 3.13 3.20 3.20 3.24

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 Invested capital. See details »

2 2020 Calculation
TO = Adjusted sales ÷ Invested capital
= 22,895 ÷ 67,209 = 0.34

3 Click competitor name to see calculations.

Efficiency ratio Description The company
TO The turnover of capital (TO) is the ratio of sales to invested capital. Capital turnover is a function of the efficiency of working capital management and of net fixed assets. Danaher Corp. TO deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.

Effective Cash Tax Rate (CTR)

Danaher Corp., CTR calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 4,999  2,089  2,614  2,261  1,869 
Add: Cash operating taxes2 380  1,287  871  930  833 
Net operating profit before taxes (NOPBT) 5,378  3,376  3,485  3,191  2,702 
Tax Rate
CTR3 7.06% 38.13% 24.99% 29.14% 30.84%
Benchmarks
CTR, Competitors4
Abbott Laboratories 12.92% 21.15% -1.36% 99.37% 37.12%
Anthem Inc. 32.42% 18.95% 24.06% 33.54% 42.54%
Becton, Dickinson & Co. 33.90% 39.16% 69.26% 7.72% 51.06%
Bristol-Myers Squibb Co. 45.70% 16.09% 59.53% 27.47%
CVS Health Corp. 29.36% 30.33% 53.80% 36.46% 37.21%
Edwards Lifesciences Corp. 15.83% 9.27% 7.99% 40.97% 26.20%
HCA Healthcare Inc. 21.16% 17.09% 18.36% 29.69% 29.05%
Intuitive Surgical Inc. 6.67% 8.23% 8.99% 32.70% 22.68%
Medtronic PLC 14.33% 19.22% 61.78% 31.90% 30.20%
Stryker Corp. 15.94% 14.04% 16.59% 47.55% 18.49%
UnitedHealth Group Inc. 22.89% 19.28% 21.66% 29.24% 38.50%

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 NOPAT. See details »

2 Cash operating taxes. See details »

3 2020 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 380 ÷ 5,378 = 7.06%

4 Click competitor name to see calculations.

Tax rate Description The company
CTR Effective cash tax rate on operating income. Danaher Corp. CTR increased from 2018 to 2019 but then decreased significantly from 2019 to 2020.