Microsoft Excel LibreOffice Calc

Medtronic PLC (NYSE:MDT)

Analysis of Short-term (Operating) Activity Ratios

Beginner level

Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.

Short-term Activity Ratios (Summary)

Medtronic PLC, short-term (operating) activity ratios

Microsoft Excel LibreOffice Calc
Apr 26, 2019 Apr 27, 2018 Apr 28, 2017 Apr 29, 2016 Apr 24, 2015 Apr 25, 2014
Turnover Ratios
Inventory turnover 2.44 2.53 2.78 2.63 1.82 2.51
Receivables turnover 4.91 5.00 5.31 5.18 3.96 4.46
Payables turnover 4.69 5.56 5.37 5.35 3.92 5.84
Working capital turnover 2.26 2.32 2.79 1.75 0.93 1.09
Average No. Days
Average inventory processing period 150 144 131 139 200 145
Add: Average receivable collection period 74 73 69 70 92 82
Operating cycle 224 217 200 209 292 227
Less: Average payables payment period 78 66 68 68 93 63
Cash conversion cycle 146 151 132 141 199 164

Based on: 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), 10-K (filing date: 2014-06-20).

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Medtronic PLC’s inventory turnover ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Receivables turnover An activity ratio equal to revenue divided by receivables. Medtronic PLC’s receivables turnover ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Medtronic PLC’s payables turnover ratio increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Medtronic PLC’s working capital turnover ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Medtronic PLC’s number of days of inventory outstanding deteriorated from 2017 to 2018 and from 2018 to 2019.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Medtronic PLC’s number of days of receivables outstanding deteriorated from 2017 to 2018 and from 2018 to 2019.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Medtronic PLC’s operating cycle deteriorated from 2017 to 2018 and from 2018 to 2019.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Medtronic PLC’s number of days of payables outstanding decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Medtronic PLC’s cash conversion cycle deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.

Inventory Turnover

Medtronic PLC, inventory turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Apr 26, 2019 Apr 27, 2018 Apr 28, 2017 Apr 29, 2016 Apr 24, 2015 Apr 25, 2014
Selected Financial Data (US$ in millions)
Cost of products sold 9,155  9,055  9,291  9,142  6,309  4,333 
Inventories, net 3,753  3,579  3,338  3,473  3,463  1,725 
Short-term Activity Ratio
Inventory turnover1 2.44 2.53 2.78 2.63 1.82 2.51
Benchmarks
Inventory Turnover, Competitors2
Becton, Dickinson & Co. 3.49 3.56 3.38 3.78 2.85 2.77
Boston Scientific Corp. 1.97 2.41 2.41 2.54 2.14 —
Danaher Corp. 4.87 4.60 4.42 4.42 4.68 —
Intuitive Surgical Inc. 2.30 2.74 3.88 4.47 4.80 —
Stryker Corp. 1.58 1.58 1.73 1.89 2.04 —
Thermo Fisher Scientific Inc. 4.22 4.49 3.86 4.48 4.62 —
Inventory Turnover, Sector
Health Care Equipment & Services 13.97 14.28 14.33 14.79 12.76 —
Inventory Turnover, Industry
Health Care 5.31 5.73 5.43 5.49 4.86 —

Based on: 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), 10-K (filing date: 2014-06-20).

1 2019 Calculation
Inventory turnover = Cost of products sold ÷ Inventories, net
= 9,155 ÷ 3,753 = 2.44

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Medtronic PLC’s inventory turnover ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Receivables Turnover

Medtronic PLC, receivables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Apr 26, 2019 Apr 27, 2018 Apr 28, 2017 Apr 29, 2016 Apr 24, 2015 Apr 25, 2014
Selected Financial Data (US$ in millions)
Net sales 30,557  29,953  29,710  28,833  20,261  17,005 
Accounts receivable, less allowances 6,222  5,987  5,591  5,562  5,112  3,811 
Short-term Activity Ratio
Receivables turnover1 4.91 5.00 5.31 5.18 3.96 4.46
Benchmarks
Receivables Turnover, Competitors2
Becton, Dickinson & Co. 7.37 6.89 6.93 7.72 6.35 7.12
Boston Scientific Corp. 5.87 6.11 5.84 5.70 5.86 —
Danaher Corp. 5.61 5.70 5.20 5.30 5.19 —
Intuitive Surgical Inc. 6.94 5.46 6.11 6.29 6.05 —
Stryker Corp. 5.14 5.83 5.66 5.76 5.98 —
Thermo Fisher Scientific Inc. 5.87 5.89 5.39 5.99 6.67 —
UnitedHealth Group Inc. 20.32 19.75 20.92 22.57 23.98 —
Receivables Turnover, Sector
Health Care Equipment & Services 10.86 10.71 10.71 11.12 10.58 —
Receivables Turnover, Industry
Health Care 7.29 7.39 7.23 7.52 7.26 —

Based on: 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), 10-K (filing date: 2014-06-20).

1 2019 Calculation
Receivables turnover = Net sales ÷ Accounts receivable, less allowances
= 30,557 ÷ 6,222 = 4.91

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Medtronic PLC’s receivables turnover ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Payables Turnover

Medtronic PLC, payables turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Apr 26, 2019 Apr 27, 2018 Apr 28, 2017 Apr 29, 2016 Apr 24, 2015 Apr 25, 2014
Selected Financial Data (US$ in millions)
Cost of products sold 9,155  9,055  9,291  9,142  6,309  4,333 
Accounts payable 1,953  1,628  1,731  1,709  1,610  742 
Short-term Activity Ratio
Payables turnover1 4.69 5.56 5.37 5.35 3.92 5.84
Benchmarks
Payables Turnover, Competitors2
Becton, Dickinson & Co. 8.24 7.89 7.72 9.76 8.85 10.34
Boston Scientific Corp. 5.75 8.06 4.89 5.42 10.40 —
Danaher Corp. 5.23 5.13 5.39 5.08 4.78 —
Intuitive Surgical Inc. 11.08 11.12 11.33 11.89 15.33 —
Stryker Corp. 7.69 7.22 8.77 8.76 8.16 —
Thermo Fisher Scientific Inc. 7.40 8.36 8.03 10.69 11.20 —
UnitedHealth Group Inc. 8.51 8.67 8.63 8.63 8.38 —
Payables Turnover, Sector
Health Care Equipment & Services 7.95 8.17 8.06 8.21 7.82 —
Payables Turnover, Industry
Health Care 5.76 5.98 5.80 5.96 5.79 —

Based on: 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), 10-K (filing date: 2014-06-20).

1 2019 Calculation
Payables turnover = Cost of products sold ÷ Accounts payable
= 9,155 ÷ 1,953 = 4.69

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Medtronic PLC’s payables turnover ratio increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

Working Capital Turnover

Medtronic PLC, working capital turnover calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Apr 26, 2019 Apr 27, 2018 Apr 28, 2017 Apr 29, 2016 Apr 24, 2015 Apr 25, 2014
Selected Financial Data (US$ in millions)
Current assets 21,967  22,980  24,873  23,600  30,844  21,210 
Less: Current liabilities 8,472  10,084  14,220  7,165  9,173  5,559 
Working capital 13,495  12,896  10,653  16,435  21,671  15,651 
 
Net sales 30,557  29,953  29,710  28,833  20,261  17,005 
Short-term Activity Ratio
Working capital turnover1 2.26 2.32 2.79 1.75 0.93 1.09
Benchmarks
Working Capital Turnover, Competitors2
Becton, Dickinson & Co. 17.14 81.96 0.79 6.35 6.20 2.17
Boston Scientific Corp. — — — — 7.18 —
Danaher Corp. 0.87 8.83 8.91 — 12.34 —
Intuitive Surgical Inc. 1.23 1.06 1.49 1.02 1.40 —
Stryker Corp. 2.14 2.76 2.76 2.40 2.24 —
Thermo Fisher Scientific Inc. 4.48 5.44 8.82 8.48 10.64 —
UnitedHealth Group Inc. — — — — — —
Working Capital Turnover, Sector
Health Care Equipment & Services 11.25 27.41 14.04 23.59 10.85 —
Working Capital Turnover, Industry
Health Care 5.35 5.21 4.29 3.54 3.72 —

Based on: 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), 10-K (filing date: 2014-06-20).

1 2019 Calculation
Working capital turnover = Net sales ÷ Working capital
= 30,557 ÷ 13,495 = 2.26

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Medtronic PLC’s working capital turnover ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Average Inventory Processing Period

Medtronic PLC, average inventory processing period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Apr 26, 2019 Apr 27, 2018 Apr 28, 2017 Apr 29, 2016 Apr 24, 2015 Apr 25, 2014
Selected Financial Data
Inventory turnover 2.44 2.53 2.78 2.63 1.82 2.51
Short-term Activity Ratio (no. days)
Average inventory processing period1 150 144 131 139 200 145
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
Becton, Dickinson & Co. 105 103 108 97 128 132
Boston Scientific Corp. 185 151 152 144 171 —
Danaher Corp. 75 79 83 83 78 —
Intuitive Surgical Inc. 159 133 94 82 76 —
Stryker Corp. 231 231 211 193 179 —
Thermo Fisher Scientific Inc. 87 81 95 82 79 —
Average Inventory Processing Period, Sector
Health Care Equipment & Services 26 26 25 25 29 —
Average Inventory Processing Period, Industry
Health Care 69 64 67 66 75 —

Based on: 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), 10-K (filing date: 2014-06-20).

1 2019 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 2.44 = 150

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Medtronic PLC’s number of days of inventory outstanding deteriorated from 2017 to 2018 and from 2018 to 2019.

Average Receivable Collection Period

Medtronic PLC, average receivable collection period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Apr 26, 2019 Apr 27, 2018 Apr 28, 2017 Apr 29, 2016 Apr 24, 2015 Apr 25, 2014
Selected Financial Data
Receivables turnover 4.91 5.00 5.31 5.18 3.96 4.46
Short-term Activity Ratio (no. days)
Average receivable collection period1 74 73 69 70 92 82
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
Becton, Dickinson & Co. 50 53 53 47 57 51
Boston Scientific Corp. 62 60 62 64 62 —
Danaher Corp. 65 64 70 69 70 —
Intuitive Surgical Inc. 53 67 60 58 60 —
Stryker Corp. 71 63 64 63 61 —
Thermo Fisher Scientific Inc. 62 62 68 61 55 —
UnitedHealth Group Inc. 18 18 17 16 15 —
Average Receivable Collection Period, Sector
Health Care Equipment & Services 34 34 34 33 35 —
Average Receivable Collection Period, Industry
Health Care 50 49 50 49 50 —

Based on: 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), 10-K (filing date: 2014-06-20).

1 2019 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 4.91 = 74

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Medtronic PLC’s number of days of receivables outstanding deteriorated from 2017 to 2018 and from 2018 to 2019.

Operating Cycle

Medtronic PLC, operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel LibreOffice Calc
Apr 26, 2019 Apr 27, 2018 Apr 28, 2017 Apr 29, 2016 Apr 24, 2015 Apr 25, 2014
Selected Financial Data
Average inventory processing period 150 144 131 139 200 145
Average receivable collection period 74 73 69 70 92 82
Short-term Activity Ratio
Operating cycle1 224 217 200 209 292 227
Benchmarks
Operating Cycle, Competitors2
Becton, Dickinson & Co. 155 156 161 144 185 183
Boston Scientific Corp. 247 211 214 208 233 —
Danaher Corp. 140 143 153 152 148 —
Intuitive Surgical Inc. 212 200 154 140 136 —
Stryker Corp. 302 294 275 256 240 —
Thermo Fisher Scientific Inc. 149 143 163 143 134 —
Operating Cycle, Sector
Health Care Equipment & Services 60 60 59 58 64 —
Operating Cycle, Industry
Health Care 119 113 117 115 125 —

Based on: 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), 10-K (filing date: 2014-06-20).

1 2019 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 150 + 74 = 224

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Medtronic PLC’s operating cycle deteriorated from 2017 to 2018 and from 2018 to 2019.

Average Payables Payment Period

Medtronic PLC, average payables payment period calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Apr 26, 2019 Apr 27, 2018 Apr 28, 2017 Apr 29, 2016 Apr 24, 2015 Apr 25, 2014
Selected Financial Data
Payables turnover 4.69 5.56 5.37 5.35 3.92 5.84
Short-term Activity Ratio (no. days)
Average payables payment period1 78 66 68 68 93 63
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
Becton, Dickinson & Co. 44 46 47 37 41 35
Boston Scientific Corp. 64 45 75 67 35 —
Danaher Corp. 70 71 68 72 76 —
Intuitive Surgical Inc. 33 33 32 31 24 —
Stryker Corp. 47 51 42 42 45 —
Thermo Fisher Scientific Inc. 49 44 45 34 33 —
UnitedHealth Group Inc. 43 42 42 42 44 —
Average Payables Payment Period, Sector
Health Care Equipment & Services 46 45 45 44 47 —
Average Payables Payment Period, Industry
Health Care 63 61 63 61 63 —

Based on: 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), 10-K (filing date: 2014-06-20).

1 2019 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 4.69 = 78

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Medtronic PLC’s number of days of payables outstanding decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.

Cash Conversion Cycle

Medtronic PLC, cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel LibreOffice Calc
Apr 26, 2019 Apr 27, 2018 Apr 28, 2017 Apr 29, 2016 Apr 24, 2015 Apr 25, 2014
Selected Financial Data
Average inventory processing period 150 144 131 139 200 145
Average receivable collection period 74 73 69 70 92 82
Average payables payment period 78 66 68 68 93 63
Short-term Activity Ratio
Cash conversion cycle1 146 151 132 141 199 164
Benchmarks
Cash Conversion Cycle, Competitors2
Becton, Dickinson & Co. 111 110 114 107 144 148
Boston Scientific Corp. 183 166 139 141 198 —
Danaher Corp. 70 72 85 80 72 —
Intuitive Surgical Inc. 179 167 122 109 112 —
Stryker Corp. 255 243 233 214 195 —
Thermo Fisher Scientific Inc. 100 99 118 109 101 —
Cash Conversion Cycle, Sector
Health Care Equipment & Services 14 15 14 14 17 —
Cash Conversion Cycle, Industry
Health Care 56 52 54 54 62 —

Based on: 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), 10-K (filing date: 2014-06-20).

1 2019 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 150 + 74 – 78 = 146

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Medtronic PLC’s cash conversion cycle deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.