Analysis of Property, Plant and Equipment
Advanced level
Property, Plant and Equipment Disclosure
Medtronic PLC, balance sheet: property, plant and equipment
US$ in millions
Based on: 10-K (filing date: 2020-06-19), 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23).
| Item | Description | The company |
|---|---|---|
| Property, plant, and equipment, at cost | Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. | Medtronic PLC’s property, plant, and equipment, at cost increased from 2018 to 2019 and from 2019 to 2020. |
| Property, plant, and equipment, net | Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. | Medtronic PLC’s property, plant, and equipment, net increased from 2018 to 2019 and from 2019 to 2020. |
Asset Age Ratios (Summary)
Medtronic PLC, asset age ratios
Based on: 10-K (filing date: 2020-06-19), 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23).
| Asset age ratio | Description | The company |
|---|---|---|
| Average age ratio | As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. | Medtronic PLC’s average age ratio of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020. |
| Estimated total useful life | Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. | Medtronic PLC’s estimated total useful life of depreciable property, plant and equipment decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level. |
| Estimated time elapsed since purchase | The approximate age in years of a company’s fixed assets. Useful for comparison purposes. | Medtronic PLC’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020. |
| Estimated remaining life | Medtronic PLC’s estimated remaining life of depreciable property, plant and equipment decreased from 2018 to 2019 but then slightly increased from 2019 to 2020. |
Average Age
Based on: 10-K (filing date: 2020-06-19), 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23).
2020 Calculations
1 Average age = 100 × Accumulated depreciation ÷ (Property, plant, and equipment, at cost – Land and land improvements)
= 100 × 6,816 ÷ (11,644 – 175) = 59.43%
| Asset age ratio | Description | The company |
|---|---|---|
| Average age | As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. | Medtronic PLC’s average age ratio of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020. |
Estimated Total Useful Life
Based on: 10-K (filing date: 2020-06-19), 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23).
2020 Calculations
1 Estimated total useful life = (Property, plant, and equipment, at cost – Land and land improvements) ÷ Depreciation expense
= (11,644 – 175) ÷ 907 = 13
| Asset age ratio | Description | The company |
|---|---|---|
| Estimated total useful life | Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. | Medtronic PLC’s estimated total useful life of depreciable property, plant and equipment decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level. |
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (filing date: 2020-06-19), 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23).
2020 Calculations
1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= 6,816 ÷ 907 = 8
| Asset age ratio | Description | The company |
|---|---|---|
| Estimated time elapsed since purchase | The approximate age in years of a company’s fixed assets. Useful for comparison purposes. | Medtronic PLC’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020. |
Estimated Remaining Life
Based on: 10-K (filing date: 2020-06-19), 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-28), 10-K (filing date: 2015-06-23).
2020 Calculations
1 Estimated remaining life = (Property, plant, and equipment, net – Land and land improvements) ÷ Depreciation expense
= (4,828 – 175) ÷ 907 = 5
| Asset age ratio | Description | The company |
|---|---|---|
| Estimated remaining life | Medtronic PLC’s estimated remaining life of depreciable property, plant and equipment decreased from 2018 to 2019 but then slightly increased from 2019 to 2020. |