Stock Analysis on Net

Medtronic PLC (NYSE:MDT)

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

Medtronic PLC, balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Apr 26, 2024 Apr 28, 2023 Apr 29, 2022 Apr 30, 2021 Apr 24, 2020 Apr 26, 2019
Operating Assets
Total assets 89,981 90,948 90,981 93,083 90,689 89,694
Less: Cash and cash equivalents 1,284 1,543 3,714 3,593 4,140 4,393
Less: Investments 6,721 6,416 6,859 7,224 6,808 5,455
Operating assets 81,976 82,989 80,408 82,266 79,741 79,846
Operating Liabilities
Total liabilities 39,561 39,283 38,260 41,481 39,817 39,482
Less: Current debt obligations 1,092 20 3,742 11 2,776 838
Less: Long-term debt 23,932 24,344 20,372 26,378 22,021 24,486
Operating liabilities 14,537 14,919 14,146 15,092 15,020 14,158
 
Net operating assets1 67,439 68,070 66,262 67,174 64,721 65,688
Balance-sheet-based aggregate accruals2 (631) 1,808 (912) 2,453 (967)
Financial Ratio
Balance-sheet-based accruals ratio3 -0.93% 2.69% -1.37% 3.72% -1.48%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Abbott Laboratories 6.06% -0.73% -1.76% -1.55%
Cigna Group -0.99% -7.83% 4.17% -7.30%
CVS Health Corp. 16.15% -9.86% -3.68% -0.89%
Elevance Health Inc. 7.14% 0.32% 14.93% -15.16%
Humana Inc. -11.37% -44.43% 111.97% 18.14%
Intuitive Surgical Inc. 15.55% -10.21% 50.02% -8.55%
UnitedHealth Group Inc. 13.41% 17.32% 4.32% 5.27%
Balance-Sheet-Based Accruals Ratio, Sector
Health Care Equipment & Services 0.00% 8.94% -1.21% 4.56% -1.66%
Balance-Sheet-Based Accruals Ratio, Industry
Health Care 0.00% 7.31% 2.87% 6.05% 10.43%

Based on: 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24), 10-K (reporting date: 2019-04-26).

1 2024 Calculation
Net operating assets = Operating assets – Operating liabilities
= 81,97614,537 = 67,439

2 2024 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2024 – Net operating assets2023
= 67,43968,070 = -631

3 2024 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × -631 ÷ [(67,439 + 68,070) ÷ 2] = -0.93%

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, Medtronic PLC improved earnings quality from 2023 to 2024.

Cash-Flow-Statement-Based Accruals Ratio

Medtronic PLC, cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Apr 26, 2024 Apr 28, 2023 Apr 29, 2022 Apr 30, 2021 Apr 24, 2020 Apr 26, 2019
Net income attributable to Medtronic 3,676 3,758 5,039 3,606 4,789 4,631
Less: Net cash provided by operating activities 6,787 6,039 7,346 6,240 7,234 7,007
Less: Net cash used in investing activities (2,366) (3,493) (1,659) (2,866) (3,203) (774)
Cash-flow-statement-based aggregate accruals (745) 1,212 (648) 232 758 (1,602)
Financial Ratio
Cash-flow-statement-based accruals ratio1 -1.10% 1.80% -0.97% 0.35% 1.16%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Abbott Laboratories 3.55% -2.08% -3.29% -2.65%
Cigna Group -2.14% -7.06% 2.43% -6.53%
CVS Health Corp. 13.47% -6.15% -4.20% -2.54%
Elevance Health Inc. 12.87% 8.35% 30.34% 4.96%
Humana Inc. 26.92% -7.68% 91.38% 24.85%
Intuitive Surgical Inc. 4.54% -20.88% 33.51% 10.64%
UnitedHealth Group Inc. 7.40% 21.73% 5.77% 6.56%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Health Care Equipment & Services 0.00% 6.92% 1.95% 4.01% -0.04%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Health Care 0.00% 7.75% 3.11% 7.13% 6.55%

Based on: 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24), 10-K (reporting date: 2019-04-26).

1 2024 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -745 ÷ [(67,439 + 68,070) ÷ 2] = -1.10%

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, Medtronic PLC improved earnings quality from 2023 to 2024.