Medtronic PLC (NYSE:MDT)

The analysis of the financial data reveals several notable trends and patterns over the six-year period.

Net Operating Profit After Taxes (NOPAT)

NOPAT exhibits variability across the years, initially declining from 4408 million USD in 2020 to 4049 million USD in 2021. This is followed by a significant increase to 4888 million USD in 2022. Subsequently, there is a downward trend over the next two years, with NOPAT decreasing to 4151 million USD in 2023 and further to 3736 million USD in 2024 before rising again to 4980 million USD in 2025. Overall, the NOPAT shows fluctuations with a peak in 2022 and 2025, indicating periods of improved profitability amidst phases of decline.

Cost of Capital

The cost of capital remains relatively stable over the period, ranging narrowly between 10.81% and 11.24%. It peaked in 2021 at 11.24% and then showed a gradual decrease, reaching its lowest point at 10.81% in 2025. This suggests a slight improvement in the company's cost efficiency or market conditions favorable to capital acquisition over time.

Invested Capital

Invested capital experiences moderate fluctuation within a tight range. It increased slightly from 71,146 million USD in 2020 to 72,405 million USD in 2021, then decreased over the following years to a low of 68,670 million USD in 2024. A modest recovery is observed in 2025, rising back up to 70,365 million USD. The data indicates relative stability in capital investment with minor contractions and expansions potentially reflecting adjustments in operational scale or capital management strategy.

Economic Profit

Economic profit remains negative throughout the period, indicating that the returns generated have consistently fallen short of the required returns based on the cost of capital. The loss is most severe in 2021 at -4092 million USD and 2024 at -3785 million USD. Although economic profit improves slightly in 2022 (-2805 million USD) and further in 2025 (-2627 million USD), it still reflects an ongoing challenge in generating value beyond the cost of invested capital.

In summary, while NOPAT and invested capital show fluctuations indicative of variable operational performance and capital allocation, the persistent negative economic profit highlights an underlying issue with value creation. Despite stable cost of capital, the company struggles to achieve returns exceeding its cost of capital, signalling potential areas for strategic reassessment to enhance economic value.

Net Income Attributable to Medtronic

The net income figures demonstrated variability over the reported periods. Starting at 4,789 million US dollars in April 2020, the net income decreased significantly to 3,606 million by April 2021. It rebounded to 5,039 million in April 2022, indicating a strong recovery. However, a subsequent decline occurred, with net income falling to 3,758 million in April 2023 and slightly decreasing again to 3,676 million in April 2024. The latest period, April 2025, shows an improvement to 4,662 million, suggesting a positive turnaround in profitability.

Net Operating Profit After Taxes (NOPAT)

NOPAT followed a somewhat similar pattern to net income, but with slightly less fluctuation. It decreased from 4,408 million in April 2020 to 4,049 million in April 2021. Then, it increased again to 4,888 million by April 2022. Thereafter, it declined to 4,151 million in April 2023 and further down to 3,736 million in April 2024. The most recent figure in April 2025 reached 4,980 million, representing the highest value among the periods analyzed and indicating improved operational profitability.

Overall Trend Analysis

Both net income and NOPAT exhibited cyclical patterns with notable decreases in 2021 and 2023-2024, followed by recoveries in 2022 and 2025. The volatility suggests the company faced varying operational and market challenges throughout the periods. The recent rise in both metrics in 2025 points towards an enhanced financial performance and operational efficiency. Furthermore, the highest NOPAT value in the final period underscores an improvement in profitability after taxes on operating income, which is a positive indicator for core business performance.

The financial data reveals notable trends in the tax-related expenses over the observed period.

Income Tax Provision (Benefit)

The income tax provision shows significant fluctuations from 2020 to 2025. Initially, in 2020, there was a tax benefit of -$751 million, indicating a negative tax provision. However, from 2021 onwards, there is a reversal to positive tax provisions, increasing from $265 million in 2021 to a peak of $1,580 million in 2023. Thereafter, the provision decreases to $1,133 million in 2024 and further to $936 million in 2025. This pattern suggests an initial tax advantage followed by growing tax liabilities that begin to moderate in the final years of the period.

Cash Operating Taxes

Cash operating taxes demonstrate a consistent upward trend throughout the period from 2020 to 2023, increasing from $761 million to $1,979 million. In 2024, there is a slight decline to $1,820 million, followed by a further decrease to $1,436 million in 2025. This rise and subsequent decline in cash taxes could reflect operational performance fluctuations or changes in tax strategies and cash management.

Overall, the data indicates evolving tax expenses with an initial tax benefit turning into substantial tax provisions and an increasing trend in cash operating taxes until 2023, followed by a moderate decline in the last two reporting periods.

The financial data shows several notable trends over the six-year period under review.

Total reported debt & leases

The total reported debt and leases have generally increased, growing from 25,742 million US dollars in April 2020 to 29,626 million US dollars in April 2025. Despite some fluctuations, such as a decrease in 2022, the overall trend is upward, indicating a gradual rise in leverage or financing through debt and leases.

Shareholders’ equity

Shareholders’ equity experienced a slight increase from 50,737 million US dollars in April 2020 to a peak of 52,551 million US dollars in April 2022. However, from that peak, equity declined steadily to 48,024 million US dollars by April 2025. This downward trajectory in equity may reflect distributions to shareholders, asset impairments, or other factors reducing net asset value.

Invested capital

Invested capital saw a modest increase from 71,146 million US dollars in April 2020 to a peak near 72,405 million US dollars in April 2021. Subsequently, it declined to a low of 68,670 million US dollars in April 2024 before rising again to 70,365 million US dollars in April 2025. This pattern suggests some variability in the company's capital investment or asset base, with a general trend of moderate fluctuation rather than sustained growth or contraction.

Economic Profit

The economic profit has exhibited significant fluctuations over the observed periods. Initially, it decreased from -3359 million US$ in 2020 to -4092 million US$ in 2021, indicating a deterioration in profitability. Subsequently, there was an improvement in 2022 with a reduction in economic loss to -2805 million US$, but this trend reversed again in 2023 and 2024, with economic profit declining to -3716 million US$ and -3785 million US$, respectively. By 2025, the economic loss improved once more to -2627 million US$, marking the lowest negative value across the timeline, suggesting some recovery in value creation though still in negative territory.

Invested Capital

The total invested capital remained relatively stable throughout the observed periods, fluctuating within a narrow range. It started at 71146 million US$ in 2020, rose slightly to 72405 million US$ in 2021, then declined to 69629 million US$ in 2022. After minor year-to-year changes, it ended at 70365 million US$ in 2025. Overall, the invested capital has not shown significant growth or decline, indicating a consistent base of assets or investment employed in the business.

Economic Spread Ratio

The economic spread ratio remained negative throughout the period, indicating that the return on invested capital was consistently below the cost of capital. The ratio worsened from -4.72% in 2020 to -5.65% in 2021, showing a decline in economic efficiency. While there was an improvement to -4.03% in 2022, the ratio again deteriorated in 2023 and 2024 to -5.27% and -5.51%, respectively. By 2025, the spread improved to -3.73%, the highest performance in the period, albeit still negative, signifying ongoing challenges in generating returns exceeding capital costs.

The financial data reveals several important trends over the six-year period.

Economic Profit

Economic profit values are consistently negative throughout the period, indicating that the company has experienced economic losses each year. After declining from -3359 million US$ in 2020 to -4092 million US$ in 2021, economic profit improved somewhat to -2805 million US$ in 2022. However, it worsened again in 2023 and 2024 before showing a notable improvement to -2627 million US$ in 2025. The overall pattern suggests volatility with some recovery in the most recent year.

Adjusted Net Sales

Adjusted net sales demonstrate a generally increasing trend across the years. Starting at 28901 million US$ in 2020, sales rose steadily each year except for a slight dip in 2023 to 31233 million US$. By 2025, adjusted net sales reached 33530 million US$, marking a period of overall growth in revenue despite minor fluctuations.

Economic Profit Margin

The economic profit margin has remained negative, mirroring the trend in economic profit, and ranges between -13.56% and -7.84%. It showed a worsening decline in 2021 (-13.56%) before improving in 2022 (-8.84%). After another dip in 2023 (-11.9%) and a slight increase in 2024 (-11.68%), the margin improved significantly by 2025 (-7.84%). This pattern indicates ongoing challenges in profitability, though with a positive trend toward less negative margins in the latest year.