Microsoft Excel LibreOffice Calc

Medtronic PLC (MDT)

Short-term (Operating) Activity Analysis

Difficulty: Beginner

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

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. of 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).

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Medtronic PLC’s inventory turnover 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 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 increased from 2017 to 2018 but then declined significantly from 2018 to 2019.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Medtronic PLC’s working capital turnover deteriorated from 2017 to 2018 and from 2018 to 2019.
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 average inventory processing period 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 average receivable collection period 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 average payables payment period declined 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 (USD $ 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 
Ratio
Inventory turnover1 2.44 2.53 2.78 2.63 1.82 2.51
Benchmarks
Inventory Turnover, Competitors
Becton, Dickinson & Co. — 3.56 3.38 3.78 2.85 2.77
Intuitive Surgical Inc. — 2.74 3.88 4.47 4.80 3.95
Stryker Corp. — 1.58 1.73 1.89 2.04 2.07
Thermo Fisher Scientific Inc. — 4.49 3.86 4.48 4.62 5.05
Inventory Turnover, Sector
Health Care Equipment & Services — 16.89 17.19 17.85 15.76 17.36
Inventory Turnover, Industry
Health Care — 5.96 5.62 5.71 5.03 4.95

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).

2019 Calculations

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

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Medtronic PLC’s inventory turnover 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 (USD $ 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 
Ratio
Receivables turnover1 4.91 5.00 5.31 5.18 3.96 4.46
Benchmarks
Receivables Turnover, Competitors
Becton, Dickinson & Co. — 6.89 6.93 7.72 6.35 7.12
Intuitive Surgical Inc. — 5.46 6.11 6.29 6.05 6.77
Stryker Corp. — 5.83 5.66 5.76 5.98 6.15
Thermo Fisher Scientific Inc. — 5.89 5.39 5.99 6.67 6.83
UnitedHealth Group Inc. — 19.75 20.92 22.57 23.98 30.50
Receivables Turnover, Sector
Health Care Equipment & Services — 11.64 11.85 12.40 12.11 13.51
Receivables Turnover, Industry
Health Care — 7.50 7.35 7.66 7.42 7.59

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).

2019 Calculations

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

Ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Medtronic PLC’s receivables turnover 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 (USD $ 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 
Ratio
Payables turnover1 4.69 5.56 5.37 5.35 3.92 5.84
Benchmarks
Payables Turnover, Competitors
Becton, Dickinson & Co. — 7.89 7.72 9.76 8.85 10.34
Intuitive Surgical Inc. — 11.12 11.33 11.89 15.33 11.65
Stryker Corp. — 7.22 8.77 8.76 8.16 10.00
Thermo Fisher Scientific Inc. — 8.36 8.03 10.69 11.20 11.45
UnitedHealth Group Inc. — 8.67 8.63 8.63 8.38 8.06
Payables Turnover, Sector
Health Care Equipment & Services — 8.38 8.32 8.50 8.14 8.26
Payables Turnover, Industry
Health Care — 5.97 5.79 5.98 5.80 5.55

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).

2019 Calculations

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

Ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Medtronic PLC’s payables turnover increased from 2017 to 2018 but then declined 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 (USD $ 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 
Ratio
Working capital turnover1 2.26 2.32 2.79 1.75 0.93 1.09
Benchmarks
Working Capital Turnover, Competitors
Becton, Dickinson & Co. — 81.96 0.79 6.35 6.20 2.17
Intuitive Surgical Inc. — 1.06 1.49 1.02 1.40 1.58
Stryker Corp. — 2.76 2.76 2.40 2.24 1.86
Thermo Fisher Scientific Inc. — 5.44 8.82 8.48 10.64 14.19
UnitedHealth Group Inc. — — — — — —
Working Capital Turnover, Sector
Health Care Equipment & Services — 27.20 12.92 20.53 10.92 9.09
Working Capital Turnover, Industry
Health Care — 5.19 4.01 3.34 3.54 2.84

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).

2019 Calculations

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

Ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Medtronic PLC’s working capital turnover 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
Ratio (no. of days)
Average inventory processing period1 150 144 131 139 200 145
Benchmarks (no. of days)
Average Inventory Processing Period, Competitors
Becton, Dickinson & Co. — 103 108 97 128 132
Intuitive Surgical Inc. — 133 94 82 76 92
Stryker Corp. — 231 211 193 179 176
Thermo Fisher Scientific Inc. — 81 95 82 79 72
Average Inventory Processing Period, Sector
Health Care Equipment & Services — 22 21 20 23 21
Average Inventory Processing Period, Industry
Health Care — 61 65 64 73 74

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).

2019 Calculations

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

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 average inventory processing period 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
Ratio (no. of days)
Average receivable collection period1 74 73 69 70 92 82
Benchmarks (no. of days)
Average Receivable Collection Period, Competitors
Becton, Dickinson & Co. — 53 53 47 57 51
Intuitive Surgical Inc. — 67 60 58 60 54
Stryker Corp. — 63 64 63 61 59
Thermo Fisher Scientific Inc. — 62 68 61 55 53
UnitedHealth Group Inc. — 18 17 16 15 12
Average Receivable Collection Period, Sector
Health Care Equipment & Services — 31 31 29 30 27
Average Receivable Collection Period, Industry
Health Care — 49 50 48 49 48

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).

2019 Calculations

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

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 average receivable collection period deteriorated from 2017 to 2018 and from 2018 to 2019.

Operating Cycle

Medtronic PLC, operating cycle calculation, comparison to benchmarks

No. of 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
Ratio
Operating cycle1 224 217 200 209 292 227
Benchmarks
Operating Cycle, Competitors
Becton, Dickinson & Co. — 156 161 144 185 183
Intuitive Surgical Inc. — 200 154 140 136 146
Stryker Corp. — 294 275 256 240 235
Thermo Fisher Scientific Inc. — 143 163 143 134 125
Operating Cycle, Sector
Health Care Equipment & Services — 53 52 49 53 48
Operating Cycle, Industry
Health Care — 110 115 112 122 122

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).

2019 Calculations

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

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
Ratio (no. of days)
Average payables payment period1 78 66 68 68 93 63
Benchmarks (no. of days)
Average Payables Payment Period, Competitors
Becton, Dickinson & Co. — 46 47 37 41 35
Intuitive Surgical Inc. — 33 32 31 24 31
Stryker Corp. — 51 42 42 45 36
Thermo Fisher Scientific Inc. — 44 45 34 33 32
UnitedHealth Group Inc. — 42 42 42 44 45
Average Payables Payment Period, Sector
Health Care Equipment & Services — 44 44 43 45 44
Average Payables Payment Period, Industry
Health Care — 61 63 61 63 66

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).

2019 Calculations

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

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 average payables payment period declined 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. of 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
Ratio
Cash conversion cycle1 146 151 132 141 199 164
Benchmarks
Cash Conversion Cycle, Competitors
Becton, Dickinson & Co. — 110 114 107 144 148
Intuitive Surgical Inc. — 167 122 109 112 115
Stryker Corp. — 243 233 214 195 199
Thermo Fisher Scientific Inc. — 99 118 109 101 93
Cash Conversion Cycle, Sector
Health Care Equipment & Services — 9 8 6 8 4
Cash Conversion Cycle, Industry
Health Care — 49 52 51 59 56

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).

2019 Calculations

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

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.