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

Edwards Lifesciences Corp. (NYSE:EW)

Return on Capital (ROC)

Advanced level

Return on Invested Capital (ROIC)

Edwards Lifesciences 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 thousands)
Net operating profit after taxes (NOPAT)1 768,464  1,050,298  704,251  615,066  554,695 
Invested capital2 3,937,900  3,697,400  2,904,204  2,855,739  2,600,426 
Performance Ratio
ROIC3 19.51% 28.41% 24.25% 21.54% 21.33%
Benchmarks
ROIC, Competitors4
Becton, Dickinson & Co. 2.14% 2.44% 1.21% 3.75% 3.22%
Boston Scientific Corp. 4.06% 10.66% 3.94% 1.32%
Danaher Corp. 7.44% 3.58% 5.83% 5.27% 4.39%
Intuitive Surgical Inc. 25.62% 42.29% 47.50% 45.15% 37.14%
Medtronic PLC 5.93% 7.27% 3.47% 4.61% 4.87%
Stryker Corp. 6.88% 10.09% 10.10% 6.78% 10.11%
Thermo Fisher Scientific Inc. 10.69% 6.68% 5.62% 1.79% 3.97%
UnitedHealth Group Inc. 20.83% 21.12% 19.67% 17.70% 14.19%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17).

1 NOPAT. See details »

2 Invested capital. See details »

3 2020 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 768,464 ÷ 3,937,900 = 19.51%

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. Edwards Lifesciences Corp.’s ROIC improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Decomposition of ROIC

Edwards Lifesciences Corp., decomposition of ROIC

Microsoft Excel LibreOffice Calc
ROIC = OPM1 × TO2 × 1 – CTR3
Dec 31, 2020 19.51% = 20.81% × 1.11 × 84.17%
Dec 31, 2019 28.41% = 26.62% × 1.18 × 90.73%
Dec 31, 2018 24.25% = 20.56% × 1.28 × 92.01%
Dec 31, 2017 21.54% = 30.33% × 1.20 × 59.03%
Dec 31, 2016 21.33% = 25.36% × 1.14 × 73.80%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17).

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 decrease in return on invested capital (ROIC) over 2020 year is the decrease in profitability measured by operating profit margin (OPM) ratio.


Operating Profit Margin (OPM)

Edwards Lifesciences 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 thousands)
Net operating profit after taxes (NOPAT)1 768,464  1,050,298  704,251  615,066  554,695 
Add: Cash operating taxes2 144,533  107,265  61,158  426,820  196,936 
Net operating profit before taxes (NOPBT) 912,997  1,157,563  765,409  1,041,886  751,631 
 
Net sales 4,386,300  4,348,000  3,722,800  3,435,300  2,963,700 
Profitability Ratio
OPM3 20.81% 26.62% 20.56% 30.33% 25.36%
Benchmarks
OPM, Competitors4
Becton, Dickinson & Co. 8.76% 10.50% 11.60% 11.65% 11.73%
Boston Scientific Corp. 11.20% 17.07% 13.06% 5.00%
Danaher Corp. 23.49% 18.77% 17.49% 17.28% 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%
Thermo Fisher Scientific Inc. 24.14% 17.60% 15.74% 14.38% 13.87%
UnitedHealth Group Inc. 9.12% 8.37% 7.85% 7.83% 7.13%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2020 Calculation
OPM = 100 × NOPBT ÷ Net sales
= 100 × 912,997 ÷ 4,386,300 = 20.81%

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. Edwards Lifesciences Corp.’s OPM improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020 not reaching 2018 level.

Turnover of Capital (TO)

Edwards Lifesciences 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 thousands)
Net sales 4,386,300  4,348,000  3,722,800  3,435,300  2,963,700 
Invested capital1 3,937,900  3,697,400  2,904,204  2,855,739  2,600,426 
Efficiency Ratio
TO2 1.11 1.18 1.28 1.20 1.14
Benchmarks
TO, Competitors3
Becton, Dickinson & Co. 0.37 0.38 0.34 0.35 0.56
Boston Scientific Corp. 0.53 0.61 0.70 0.69
Danaher Corp. 0.34 0.31 0.44 0.43 0.40
Intuitive Surgical Inc. 0.98 1.35 1.47 1.86 1.31
Medtronic PLC 0.41 0.42 0.43 0.37 0.37
Stryker Corp. 0.53 0.64 0.65 0.71 0.66
Thermo Fisher Scientific Inc. 0.53 0.48 0.47 0.40 0.42
UnitedHealth Group Inc. 2.96 3.13 3.20 3.20 3.24

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17).

1 Invested capital. See details »

2 2020 Calculation
TO = Net sales ÷ Invested capital
= 4,386,300 ÷ 3,937,900 = 1.11

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. Edwards Lifesciences Corp.’s TO deteriorated from 2018 to 2019 and from 2019 to 2020.

Effective Cash Tax Rate (CTR)

Edwards Lifesciences 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 thousands)
Net operating profit after taxes (NOPAT)1 768,464  1,050,298  704,251  615,066  554,695 
Add: Cash operating taxes2 144,533  107,265  61,158  426,820  196,936 
Net operating profit before taxes (NOPBT) 912,997  1,157,563  765,409  1,041,886  751,631 
Tax Rate
CTR3 15.83% 9.27% 7.99% 40.97% 26.20%
Benchmarks
CTR, Competitors4
Becton, Dickinson & Co. 33.90% 39.16% 69.26% 7.72% 51.06%
Boston Scientific Corp. 31.27% -1.99% 56.97% 61.66%
Danaher Corp. 7.06% 38.13% 24.99% 29.14% 30.84%
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%
Thermo Fisher Scientific Inc. 15.78% 21.66% 23.84% 69.25% 31.24%
UnitedHealth Group Inc. 22.89% 19.28% 21.66% 29.24% 38.50%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2020 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 144,533 ÷ 912,997 = 15.83%

4 Click competitor name to see calculations.

Tax rate Description The company
CTR Effective cash tax rate on operating income. Edwards Lifesciences Corp.’s CTR increased from 2018 to 2019 and from 2019 to 2020.