Stock Analysis on Net

Stryker Corp. (NYSE:SYK)

$22.49

This company has been moved to the archive! The financial data has not been updated since April 29, 2022.

Analysis of Income Taxes

Microsoft Excel

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Income Tax Expense (Benefit)

Stryker Corp., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
United States federal
United States state and local
International
Current income tax expense
United States federal
United States state and local
International
Deferred income tax expense (benefit)
Income tax expense (benefit)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).


The analysis of income tax expenses over the five-year period reveals notable fluctuations and distinct trends in current and deferred components.

Current Income Tax Expense
The current income tax expense shows a pronounced downward trend from 2017 to 2020, declining from 1,007 million US dollars to 307 million US dollars. This suggests a significant reduction in the tax liabilities paid within the year during this period. However, in 2021, there is a marked increase to 524 million US dollars, indicating a rebound in current tax expense after several years of decline.
Deferred Income Tax Expense (Benefit)
This component exhibits considerable volatility. The deferred income tax expense starts with a modest expense of 36 million US dollars in 2017, then sharply turns into a substantial benefit of 1,582 million US dollars in 2018, indicating a reversal or recognition of tax benefits or timing differences. In 2019 and 2020, the deferred component fluctuates back to positive but smaller expenses of 126 million and 48 million US dollars, respectively. In 2021, it returns to a tax benefit of 237 million US dollars, reflecting ongoing variability in the recognition of deferred tax liabilities or assets.
Total Income Tax Expense (Benefit)
The total income tax expense, combining current and deferred amounts, reflects the fluctuations seen in the components. In 2017, the total expense was 1,043 million US dollars. A significant overall tax benefit occurred in 2018 with a negative amount of 1,197 million US dollars, driven primarily by the large deferred tax benefit. Following that, the total tax expense turned positive again in 2019 and 2020 at 479 million and 355 million US dollars, respectively, before decreasing to 287 million US dollars in 2021. The swings in total tax expense appear strongly influenced by variations in deferred income tax expense.

Overall, the fiscal yearly data indicate an environment of significant changes in deferred tax accounting, which heavily impacts total tax expense figures. The current tax expense shows a declining trend initially but experiences an increase in the latest year, while deferred tax expenses alternate between benefits and expenses, causing substantial variations in total income tax expense outcomes.


Effective Income Tax Rate (EITR)

Stryker Corp., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
United States federal statutory tax rate
United States state and local income taxes, less federal deduction
Foreign income tax at rates other than 21%
Tax related to repatriation of foreign earnings
Intellectual property transfer
Other
Effective income tax rate, before Tax Cuts and Jobs Act of 2017
Tax Cuts and Jobs Act of 2017 transition tax
Tax Cuts and Jobs Act of 2017 deferred tax changes
Effective income tax rate

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).


United States federal statutory tax rate
The federal statutory tax rate decreased significantly from 35% in 2017 to 21% in 2018 and remained stable at 21% through 2021, reflecting changes in tax legislation.
United States state and local income taxes, less federal deduction
This rate showed variability over the years, dropping sharply from 1.2% in 2017 to 0.4% in 2018, rising again to 1.7% in 2019, falling to a low of 0.1% in 2020, and then increasing notably to 2.7% in 2021.
Foreign income tax at rates other than 21%
This item consistently demonstrated negative percentages throughout, starting at -21% in 2017, improving steadily to -6.5% in 2018, then gradually decreasing in magnitude to -4.6%, -3.3%, and finally -6.9% in 2021. This suggests a reduction in foreign income tax expense at rates different from the standard 21%, albeit with some fluctuation.
Tax related to repatriation of foreign earnings
The repatriation tax showed fluctuations with no values in 2017, a small positive value of 0.5% in 2018, turning negative (-0.5%) in 2019, then shifting to more substantial positive values of 3% in 2020 and 1.4% in 2021. This indicates varying tax impacts from repatriated earnings over the period.
Intellectual property transfer
This component experienced significant volatility. It began with a large negative impact of -63.8% in 2018, which then swung to a positive 3.5% in 2019, followed by moderate negative values of -1.4% in 2020 and -2.3% in 2021. The large negative in 2018 may be related to transitional effects or one-time adjustments.
Other tax effects
These effects steadily decreased in magnitude from -4.9% in 2017 to -4% in 2018, followed by less negative values of -2.4% in 2019 and -1.2% in 2020, before increasing again negatively to -3.3% in 2021.
Effective income tax rate, before Tax Cuts and Jobs Act of 2017
The rate was 10.3% in 2017, dropped dramatically to -52.4% in 2018, rebounded to positive territory at 18.7% in 2019, and remained relatively stable at 18.2% in 2020 before declining to 12.6% in 2021. The sharp decline in 2018 suggests significant tax impacts or adjustments predating the full effects of the Act.
Tax Cuts and Jobs Act of 2017 transition tax
This tax was significant in 2017 at 38%, sharply reduced to 2.2% in 2018, and then did not appear in subsequent years, indicating a one-time tax effect related to the legislative changes.
Tax Cuts and Jobs Act of 2017 deferred tax changes
Deferred tax changes related to the Act were 2.3% in 2017, slightly negative at -0.6% in 2018, and absent thereafter, reflecting transitional accounting for the legislation.
Effective income tax rate
The overall effective income tax rate mirrored the pre-Act rate before 2019 with a high of 50.6% in 2017 followed by an anomalous -50.8% in 2018, then stabilized at 18.7% in 2019 and 18.2% in 2020, finally dropping to 12.6% in 2021. This suggests normalization of tax expenses post-transition, with a downward trend toward lower effective taxation in the later years.

Components of Deferred Tax Assets and Liabilities

Stryker Corp., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Inventories
Product-related liabilities
Other accrued expenses
Depreciation and amortization
State income taxes
Share-based compensation
Net operating loss and other credit carryforwards
Other
Deferred income tax assets
Valuation allowances
Net deferred income tax assets
Depreciation and amortization
Undistributed earnings
Other
Deferred income tax liabilities
Net deferred income tax assets (liabilities)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).


The financial data reveals several notable trends and fluctuations across the given periods. Inventories experienced a decline from 2017 to 2018, followed by gradual increases reaching a peak in 2021, indicating growing stock levels over the later years after an initial decrease. Product-related liabilities showed variability, initially increasing sharply in 2018 but then progressively declining through 2021, possibly reflecting changes in short-term obligations associated with products.

Other accrued expenses remained relatively stable between 2017 and 2019, but surged significantly in 2020, maintaining a high level in 2021, suggesting increased liabilities or accrued costs during these years. Depreciation and amortization, excluding the negative values which may represent adjustments or offsets, demonstrated a general downward trend from its peak in 2018 to 2021, indicating potentially lower capital expenditures or amortization schedules.

State income taxes rose consistently from 2017 through 2021, which aligns with increased taxable income or changing tax circumstances. Share-based compensation showed a steady upward trend, reflecting an ongoing increase in equity-based remuneration expenses over time. Net operating loss and other credit carryforwards exhibited significant volatility, spiking in 2020 and dropping in 2021, which could relate to utilization or adjustments of tax loss carryforwards.

Deferred income tax assets grew substantially from 2017 to 2018, maintaining elevated levels through 2021 with some fluctuations. Simultaneously, valuation allowances increased negatively (greater allowances) over time until 2020 before slightly improving in 2021, impacting net deferred income tax assets accordingly. Net deferred income tax assets showed a rising trend peaking in 2020, with a slight dip in 2021.

Negative depreciation and amortization (likely representing accumulated depreciation or other offsets) increased in magnitude until 2020 but reduced somewhat in 2021. Undistributed earnings recorded negative values throughout but demonstrated some recovery in the latter years. Deferred income tax liabilities rose consistently until 2020 before dropping notably in 2021, affecting the net deferred income tax assets (liabilities) which increased overall from 2017 to 2021, although the pattern was not strictly linear.

Inventories
Initial decline followed by steady growth, peak in 2021 signaling increased stockholding.
Product-related liabilities
Sharp increase in 2018, gradually decreasing through 2021, indicating tightened product-related obligations.
Other accrued expenses
Relatively stable until 2019, sharp increase in 2020 and maintained high level in 2021.
Depreciation and amortization
Peaked in 2018, then declining progressively to 2021, suggesting lower capital asset charges.
State income taxes
Consistent rise over the years, reflecting increased taxable income or tax rate changes.
Share-based compensation
Steady increase, indicating growing equity compensation commitments.
Net operating loss and other credit carryforwards
Volatile with large spike in 2020, possibly from tax strategy or operational losses.
Deferred income tax assets
Substantial growth by 2018, fluctuating thereafter but generally high.
Valuation allowances
Increasing negatively until 2020, then minor recovery, affecting net deferred tax assets.
Net deferred income tax assets
Increased through 2020, slight downturn in 2021 following changes in allowances.
Negative depreciation and amortization
Increased in absolute value until 2020, then decreased, affecting net asset values.
Undistributed earnings
Negative throughout with volatility, with recovery signs in the last periods.
Deferred income tax liabilities
Increasing until 2020, then a notable decrease in 2021, impacting net tax positions.
Net deferred income tax assets (liabilities)
Strong increase overall, reflecting complex dynamics between assets and liabilities in tax positions.

Deferred Tax Assets and Liabilities, Classification

Stryker Corp., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Noncurrent deferred income tax assets
Noncurrent deferred income tax liabilities (included in Other noncurrent liabilities)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).


The financial data over the five-year period reveals notable fluctuations in the values of noncurrent deferred income tax assets and liabilities.

Noncurrent Deferred Income Tax Assets
The value of noncurrent deferred income tax assets exhibited a significant increase from 2017 to 2018, rising from 283 million USD to 1,678 million USD. Following this sharp rise, the assets experienced a slight decline and a relatively stable period until 2020, with values of 1,575 million USD and 1,530 million USD respectively. In 2021, the assets saw a resurgence, increasing to 1,760 million USD, reaching the highest value in the observed timeframe. This trend suggests an initial recognition or accumulation of deferred tax assets, followed by minor adjustments and eventual growth in the latest year.
Noncurrent Deferred Income Tax Liabilities
The noncurrent deferred income tax liabilities started at 47 million USD in 2017 and showed gradual growth to 54 million USD in 2018. Between 2018 and 2020, these liabilities increased more notably, almost doubling to 108 million USD in 2019 and reaching 117 million USD in 2020. However, in 2021, liabilities decreased significantly to 68 million USD, indicating a potential reduction or settlement of deferred liabilities in that year.

Overall, the noncurrent deferred income tax assets have consistently been substantially higher than the liabilities throughout the period. The upward trends in assets, barring minor dips, suggest ongoing deferred tax recognition or benefits, while the liabilities' fluctuations imply variations in future tax obligations. The sharp increase in assets between 2017 and 2018 and the subsequent high levels may reflect strategic tax planning or changes in tax regulations impacting deferred tax accounting. The notable reduction in liabilities in 2021 could indicate effective tax management or changes in the company's financial position related to deferred tax obligations.


Adjustments to Financial Statements: Removal of Deferred Taxes

Stryker Corp., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Adjustment to Total Assets
Total assets (as reported)
Less: Noncurrent deferred tax assets, net
Total assets (adjusted)
Adjustment to Total Liabilities
Total liabilities (as reported)
Less: Noncurrent deferred tax liabilities, net
Total liabilities (adjusted)
Adjustment to Total Stryker Shareholders’ Equity
Total Stryker shareholders’ equity (as reported)
Less: Net deferred tax assets (liabilities)
Total Stryker shareholders’ equity (adjusted)
Adjustment to Net Earnings
Net earnings (as reported)
Add: Deferred income tax expense (benefit)
Net earnings (adjusted)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).


The financial data over the five-year period reveals several notable trends in the reported and adjusted figures for total assets, liabilities, shareholders’ equity, and net earnings.

Total Assets
Reported total assets exhibited steady growth from US$22,197 million in 2017 to US$34,631 million in 2021, representing a compound increase indicative of asset expansion over time. Adjusted total assets show a similar upward trend, rising from US$21,914 million to US$32,871 million during the same period, though consistently slightly below the reported figures. This suggests that deferred income tax adjustments moderately reduce asset valuations but do not materially alter the growth pattern.
Total Liabilities
Reported total liabilities increased from US$12,217 million in 2017 to a peak of US$21,246 million in 2020, before decreasing to US$19,754 million in 2021. Adjusted total liabilities follow a comparable trajectory, reaching US$21,129 million in 2020 and then declining to US$19,686 million in 2021. The peak in 2020 may reflect increased borrowing or obligations coinciding with expansion activities, with subsequent deleveraging as observed in 2021.
Stryker Shareholders’ Equity
Reported shareholders’ equity increased at a more moderate pace from US$9,966 million in 2017 to US$14,877 million in 2021. Adjusted equity figures are lower but similarly trending upward, moving from US$9,730 million to US$13,185 million over the same timeframe. The consistent growth in equity alongside rising assets and liabilities indicates ongoing value creation and retention within the company.
Net Earnings
Reported net earnings showed significant volatility, starting at US$1,020 million in 2017 and surging dramatically to US$3,553 million in 2018, before declining to US$1,599 million in 2020 and partially recovering to US$1,994 million in 2021. Adjusted net earnings presented a less erratic pattern, increasing from US$1,056 million in 2017 to US$2,209 million in 2019, then declining to US$1,647 million in 2020 and slightly rebounding to US$1,757 million in 2021. The disparity between reported and adjusted earnings in 2018 is particularly pronounced, suggesting significant impacts from deferred tax items or one-time effects during that year.

Overall, the company demonstrated a consistent increase in asset base and equity over the period, with liabilities peaking in 2020 followed by reduction in 2021. Earnings showed variability, with adjusted figures smoothing out some of the fluctuations observed in reported earnings, highlighting the influence of income tax adjustments on the company’s financial performance representation.


Stryker Corp., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Stryker Corp., adjusted financial ratios

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Total Asset Turnover
Reported total asset turnover
Adjusted total asset turnover
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).


Net Profit Margin Trends
The reported net profit margin exhibited significant volatility, starting at 8.2% in 2017, peaking notably at 26.12% in 2018, then declining sharply to 11.66% by 2021. The adjusted net profit margin shows a more moderated variation, initially improving from 8.49% in 2017 to a peak near 14.84% in 2019, followed by a gradual decline to 10.27% in 2021. This indicates that after adjustments, profitability remained relatively stable but decreased in the later years.
Total Asset Turnover Behavior
Both reported and adjusted total asset turnover ratios show a downward trend from 2017 through 2020, with reported turnover falling from 0.56 to 0.42 and adjusted from 0.57 to 0.44. In 2021, a modest recovery is observed, with values rising to 0.49 and 0.52 respectively. This suggests a temporary decline in asset efficiency, with some improvement toward the end of the period.
Financial Leverage Patterns
Financial leverage ratios, both reported and adjusted, gradually increased from 2017 to 2020, reaching peaks of 2.62 and 2.81 respectively, before decreasing in 2021 to 2.33 and 2.49. The adjusted leverage consistently remained slightly above reported figures, indicating that after tax adjustments, the company maintained a somewhat higher reliance on debt or liabilities to finance assets until a reduction occurred in the final reported year.
Return on Equity (ROE) Analysis
The reported ROE demonstrates a pronounced spike in 2018 at 30.29%, followed by a steady decline to 13.4% in 2021. The adjusted ROE shows a less extreme peak in 2018 at 19.5%, with a more gradual drop to 13.33% in 2021. The data implies that earnings generated for shareholders were exceptionally high in 2018 but normalized and decreased over the subsequent years after adjustments.
Return on Assets (ROA) Observations
Reported ROA increased significantly in 2018 to 13.05%, then declined steadily to 5.76% in 2021. Adjusted ROA displayed a more moderate rise to 7.71% in 2018, then remained relatively stable before slightly decreasing towards 5.35% by 2021. This points to improved asset profitability in 2018, followed by a stabilization at a lower level in later years once deferred tax effects are accounted for.

Stryker Corp., Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net earnings
Net sales
Profitability Ratio
Net profit margin1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings
Net sales
Profitability Ratio
Adjusted net profit margin2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Net profit margin = 100 × Net earnings ÷ Net sales
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net earnings ÷ Net sales
= 100 × ÷ =


Net Earnings Trends
Reported net earnings exhibited significant volatility over the five-year period. There was a sharp increase from 1,020 million USD in 2017 to a peak of 3,553 million USD in 2018, followed by a decline to 2,083 million USD in 2019. Subsequently, earnings decreased further to 1,599 million USD in 2020, before rising again to 1,994 million USD in 2021.
Adjusted net earnings followed a somewhat similar but less volatile trajectory. Starting at 1,056 million USD in 2017, they increased to 1,971 million USD in 2018 and further to 2,209 million USD in 2019. Afterwards, a decline was observed to 1,647 million USD in 2020, with a modest recovery to 1,757 million USD in 2021.
Profit Margin Analysis
Reported net profit margin showed a remarkable rise from 8.2% in 2017 to a high of 26.12% in 2018, which corresponds with the spike in reported net earnings. This margin then retraced to 13.99% in 2019, followed by further decreases to 11.14% in 2020 and a slight increase to 11.66% in 2021.
Adjusted net profit margin demonstrated more stability but exhibited a decreasing trend after 2019. It rose from 8.49% in 2017 to 14.49% in 2018 and peaked slightly higher at 14.84% in 2019. From 2020 onward, there was a decline to 11.48% and then to 10.27% by 2021.
Insights
The data suggest that 2018 was an exceptional year with a substantial surge in reported earnings and profit margin, which may reflect extraordinary items or accounting adjustments affecting reported figures. Adjusted earnings and margins present a more consistent performance, with gradual growth until 2019 followed by a decline, possibly due to external market conditions or operational challenges.
The divergence between reported and adjusted figures in 2018 indicates the presence of significant non-recurring items impacting net earnings and profit margins. The overall trend from 2019 to 2021 shows a moderate recovery in net earnings but a gradual contraction in adjusted profitability, highlighting potential margin pressures or increasing costs.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net sales
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= ÷ =


Reported Total Assets
The reported total assets of the company showed a consistent upward trend over the five-year period. Starting at $22,197 million in 2017, the assets increased steadily each year, reaching $34,631 million by 2021. This indicates ongoing asset growth, though the rate of increase slightly moderated in the final year.
Adjusted Total Assets
Adjusted total assets followed a similar upward trajectory as the reported figures but remained marginally lower throughout the period. The adjusted assets grew from $21,914 million in 2017 to $32,871 million in 2021, paralleling the reported asset growth but indicating adjustments primarily reducing asset values relative to reported totals.
Reported Total Asset Turnover
The reported total asset turnover ratio demonstrated a declining trend from 0.56 in 2017 to a low of 0.42 in 2020, before partially recovering to 0.49 in 2021. The initial decline suggests decreasing efficiency in asset usage or revenue generation per unit of asset base, while the rebound in the final year may indicate operational improvements or better asset utilization.
Adjusted Total Asset Turnover
The adjusted total asset turnover ratio echoed the pattern observed in the reported ratio but exhibited slightly higher values throughout the period. Starting at 0.57 in 2017, the ratio declined to 0.44 in 2020 and recovered to 0.52 in 2021. The adjusted turnover's higher levels suggest that the adjustments to the asset base may reflect a more efficient asset utilization scenario than indicated by reported figures alone.
Overall Insights
The data presents a scenario of growing asset bases, both reported and adjusted, with a tendency toward decreasing asset turnover ratios until 2020, followed by a moderate recovery in 2021. The fluctuations in asset turnover ratios may point to operational challenges or strategic shifts impacting revenue generation relative to assets during the middle years, with signs of restoration in the latest year. The consistent gap between reported and adjusted assets and turnover ratios highlights the potential impact of deferred income tax and other adjustments on financial performance metrics.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Total assets
Total Stryker shareholders’ equity
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted total Stryker shareholders’ equity
Solvency Ratio
Adjusted financial leverage2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Financial leverage = Total assets ÷ Total Stryker shareholders’ equity
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Stryker shareholders’ equity
= ÷ =


The financial data displays a continuous growth trajectory in both reported and adjusted total assets over the five-year period. Reported total assets increased from approximately 22.2 billion US dollars at the end of 2017 to around 34.6 billion by the end of 2021, representing substantial growth. Adjusted total assets, which account for income tax adjustments, show a similar upward trend, rising from roughly 21.9 billion to about 32.9 billion US dollars during the same period. The slightly lower adjusted figures reflect the impacts of deferred income tax considerations.

Shareholders’ equity also demonstrated consistent growth across the analyzed years. Reported total shareholders’ equity rose from nearly 10 billion to close to 14.9 billion US dollars by the end of 2021. Adjusted shareholders’ equity figures, which again consider tax adjustments, increased from approximately 9.7 billion in 2017 to about 13.2 billion in 2021. The adjustment in equity values suggests some deferred tax effects but maintains a steady upward movement, indicating improving financial strength.

Examining the leverage ratios reveals more variability. The reported financial leverage ratio started at 2.23 in 2017, increased moderately to a peak of 2.62 in 2020, and then declined to 2.33 in 2021. The adjusted financial leverage ratio follows a similar pattern but at generally higher levels, beginning at 2.25, rising to 2.81 in 2020, and decreasing to 2.49 in 2021. The higher adjusted leverage ratios highlight additional liabilities recognized through deferred tax adjustments. The peak in 2020 suggests a period of increased reliance on debt or liabilities relative to equity, followed by a modest deleveraging in 2021.

Overall, the data reflects strong asset and equity growth with a temporary increase in leverage that recedes in the final year. The adjustments for deferred income taxes slightly moderate the asset and equity values but indicate a consistent trend in the company’s financial structure. The fluctuation in leverages points to strategic capital structure management, potentially related to investment or financing activities especially during 2020.

Total Assets
Consistently increased from approximately 22 billion to 34.6 billion US dollars over five years, with adjusted assets slightly lower due to tax-related adjustments.
Shareholders’ Equity
Steadily grew from around 10 billion to nearly 15 billion US dollars in reported terms, with adjusted equity about 10-15% lower, reflecting deferred tax impacts.
Financial Leverage
Experienced an upward trend peaking in 2020, indicating higher debt levels relative to equity, followed by a reduction in 2021; adjusted leverage ratios are higher than reported, reflecting deferred tax liabilities.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net earnings
Total Stryker shareholders’ equity
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings
Adjusted total Stryker shareholders’ equity
Profitability Ratio
Adjusted ROE2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 ROE = 100 × Net earnings ÷ Total Stryker shareholders’ equity
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net earnings ÷ Adjusted total Stryker shareholders’ equity
= 100 × ÷ =


The reported net earnings exhibit significant fluctuations over the period from 2017 to 2021. The value surged notably from 1,020 million US dollars in 2017 to a peak of 3,553 million in 2018, followed by a sharp decline to 2,083 million in 2019. This downward trend continued with further reductions to 1,599 million in 2020 before a modest recovery to 1,994 million in 2021.

Adjusted net earnings, on the other hand, follow a less volatile pattern. Starting from 1,056 million US dollars in 2017, adjusted earnings rose to 1,971 million in 2018, increasing slightly to 2,209 million in 2019. A decline is observed in 2020 with earnings falling to 1,647 million, and this is followed by a minor increase to 1,757 million in 2021. The adjusted figures tend to smooth out the more pronounced fluctuations seen in reported earnings, suggesting the adjustments mitigate the impact of certain one-off or non-recurring items.

Regarding shareholders’ equity, both reported and adjusted figures show consistent growth across the five-year span. Reported total shareholders’ equity increased steadily from 9,966 million US dollars in 2017 to 14,877 million in 2021. Adjusted shareholders’ equity also grew but at a slightly slower pace, from 9,730 million in 2017 to 13,185 million in 2021. The difference between the reported and adjusted figures widens somewhat over the years, indicating that adjustments increasingly impact equity calculations.

Return on equity (ROE) based on reported data demonstrates considerable volatility. Starting at 10.23% in 2017, it surged sharply to 30.29% in 2018 before gradually declining to 16.26% in 2019, 12.22% in 2020, and a slight rebound to 13.4% in 2021. Adjusted ROE values exhibit a more moderated trend, starting at 10.85% in 2017 and increasing to nearly 19.5% in both 2018 and 2019. This is followed by a decline to 14.11% in 2020 and a further decrease to 13.33% in 2021. The adjusted ROE figures reinforce the observation that adjustments temper the volatility present in reported results.

Overall, the trends suggest that the company experienced a period of strong earnings growth followed by correction and stabilization. Adjusted figures consistently portray a more stable financial performance, reducing the effects of irregular items on earnings and equity. The ROE metrics reflect these dynamics, with adjusted returns presenting smoother transitions and less dramatic swings compared to the reported figures. The growth in shareholders’ equity, both reported and adjusted, indicates a strengthening balance sheet over the analyzed timeframe.


Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net earnings
Total assets
Profitability Ratio
ROA1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 ROA = 100 × Net earnings ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Adjusted net earnings ÷ Adjusted total assets
= 100 × ÷ =


Net Earnings
Reported net earnings exhibited significant volatility over the observed periods, with a notable peak in 2018 reaching 3,553 million US dollars, followed by a sharp decline in 2019 and 2020 to 2,083 million and 1,599 million respectively before increasing again to 1,994 million in 2021. Adjusted net earnings followed a slightly different trajectory, peaking in 2019 at 2,209 million US dollars and experiencing a decline in 2020, then a marginal recovery in 2021. The difference between reported and adjusted net earnings suggests variability in items excluded during adjustment, particularly evident in 2018 and 2019.
Total Assets
Both reported and adjusted total assets demonstrated a steady upward trend from 2017 through 2021. Reported total assets increased from 22,197 million US dollars in 2017 to 34,631 million in 2021. Adjusted total assets displayed a similar pattern, rising from 21,914 million US dollars in 2017 to 32,871 million in 2021. The relatively small gaps between reported and adjusted figures indicate consistent asset valuation adjustments over time.
Return on Assets (ROA)
Reported ROA showed strong variability, peaking at 13.05% in 2018, then declining substantially to 6.9% in 2019 and further down to 4.66% in 2020, with a modest recovery to 5.76% in 2021. Adjusted ROA remained more stable, with a lower peak of 7.73% in 2019, and a less pronounced decline over subsequent years, ending at 5.35% in 2021. The higher reported ROA in 2018 is consistent with the elevated reported net earnings that year, indicating that adjustments to net earnings and assets moderate the volatility seen in reported profitability.
Overall Trends and Insights
The data indicates a period of considerable fluctuations in profitability, particularly in reported net earnings and reported ROA, with a peak in 2018 followed by declines and partial recoveries. Adjusted figures present a smoother trend line, likely due to exclusion of non-recurring items or tax-related adjustments. Steady growth in total assets suggests ongoing investment or expansion affecting the asset base. The divergence between reported and adjusted metrics highlights the impact of reported income tax and other one-time charges on financial results, which diminishes trend volatility when adjustments are applied.