Stryker Corp. (NYSE:SYK)

The analysis of the financial ratios over the five-year period reveals several notable trends in operational efficiency, liquidity, leverage, profitability, and returns.

Asset Turnover

The reported total asset turnover shows a gradual decline from 0.56 in 2017 to a low of 0.42 in 2020, before recovering slightly to 0.49 in 2021. The adjusted total asset turnover follows a similar pattern, decreasing from 0.56 in 2017 to 0.44 in 2020, then rising again to 0.52 in 2021. This indicates that asset utilization efficiency experienced a dip around 2020 but began to improve thereafter.

Liquidity Ratios

Both the reported and adjusted current ratios fluctuate over the period. The reported current ratio decreased from 2.29 in 2017 to 2.02 in 2018, then increased sharply to 2.58 in 2019, followed by a drop to 1.93 in 2020 and a recovery to 2.20 in 2021. The adjusted current ratio exhibits similar movements. Overall, liquidity shows some volatility but maintains a comfortable margin above 1.9, suggesting reasonable short-term financial stability despite fluctuations.

Leverage Ratios

The reported debt to equity ratio rose steadily from 0.72 in 2017 to a peak of 1.07 in 2020, before declining to 0.84 in 2021. Similarly, the adjusted debt to equity ratio increased from 0.77 in 2017, reaching 1.22 in 2020, then falling to 0.97 in 2021. The reported debt to capital ratio also trends upward from 0.42 in 2017 to 0.52 in 2020, decreasing to 0.46 in 2021; the adjusted ratio mirrors this pattern. Financial leverage ratios increased from around 2.2 in 2017 to peak levels near 2.8 in 2020, before moderating in 2021. These trends suggest growing reliance on debt financing, culminating in 2020, followed by some deleveraging in 2021.

Profitability Margins

The reported net profit margin shows a large spike in 2018 to 26.12%, followed by a decline to 11.14% in 2020 and a slight increase to 11.66% in 2021. Conversely, the adjusted net profit margin rises more steadily from 10.18% in 2017 to a peak of 15.17% in 2019, then drops sharply to 7.94% in 2020 before rebounding to 14.14% in 2021. The profitability margins indicate heightened volatility, especially in 2018 and 2020, yet adjusted performance suggests an underlying recovery in 2021.

Return on Equity (ROE)

The reported ROE increased sharply from 10.23% in 2017 to 30.29% in 2018, then declined consistently to 12.22% in 2020 and slightly recovered to 13.40% in 2021. The adjusted ROE also peaks in 2019 at 19.76%, falls to 9.65% in 2020, and improves to 18.12% in 2021. These figures reflect significant fluctuations in shareholder returns, with a pronounced dip during 2020 followed by improvement in the subsequent year.

Return on Assets (ROA)

The reported ROA peaks at 13.05% in 2018 but declines to 4.66% in 2020, then moderately improves to 5.76% in 2021. The adjusted ROA similarly peaks in 2019 at 7.87%, drops significantly in 2020 to 3.46%, and rises again to 7.32% in 2021. These results suggest a decline in the company’s efficiency in generating profits from assets during 2020, with partial recovery afterwards.

In summary, the data indicates that the company experienced challenges in asset utilization, profitability, and returns during 2020, a year marked by declines in key performance metrics. There is evidence of recovery and stabilization by 2021 in liquidity, leverage, profitability, and returns, though some volatility persists. The increased leverage observed until 2020 implies a higher financial risk that has been somewhat reduced in the latest year. Overall, the company’s financial performance shows sensitivity to external conditions, with a trend toward gradual normalization after the disruptions observed in 2020.

The financial data reveals several notable trends over the five-year period. Net sales have shown a consistent upward trajectory, increasing from $12,444 million in 2017 to $17,108 million in 2021. This suggests steady growth in revenue despite a slight dip in 2020, potentially indicating external pressures impacting sales during that year.

Total assets have increased substantially over the same period, rising from $22,197 million in 2017 to $34,631 million in 2021. This accumulation of assets reflects significant investment or acquisition activities and an expanding asset base. Adjusted total assets exhibit a similar pattern, growing from $22,269 million to $33,038 million, paralleling the trend of reported total assets but with slightly different valuation adjustments.

Asset Turnover Ratios

Reported total asset turnover shows a downward trend from 0.56 in 2017 to 0.42 in 2020, followed by a recovery to 0.49 in 2021. This drop indicates that while asset levels increased, the efficiency of generating sales from these assets declined temporarily before improving.

Adjusted total asset turnover follows a comparable pattern, decreasing from 0.56 in 2017 to 0.44 in 2020 and then rebounding to 0.52 in 2021. This suggests that when considering adjustments, asset utilization efficiency weakened initially but improved by the final year.

Overall, the data suggests that the company expanded its asset base significantly while maintaining growth in net sales. However, the efficiency with which the company has utilized its assets to generate sales diminished around 2020, possibly reflecting challenges during that period, before improving in 2021. The recovery in asset turnover ratios by 2021 points to a potentially enhanced operational performance or better alignment between asset deployment and sales generation in the latest year reported.

Current Assets

Current assets showed an overall increasing trend from 2017 to 2019, rising from 7,993 million US dollars to 11,360 million US dollars. However, there was a noticeable decline in 2020 to 9,707 million US dollars, followed by a slight recovery in 2021 to 10,017 million US dollars.

Current Liabilities

Current liabilities increased significantly from 3,485 million US dollars in 2017 to 4,807 million US dollars in 2018. After a reduction in 2019 to 4,400 million US dollars, there was an increase again in 2020 to 5,041 million US dollars, followed by a decrease to 4,549 million US dollars in 2021.

Reported Current Ratio

The reported current ratio exhibited some volatility over the period. It decreased from 2.29 in 2017 to 2.02 in 2018, improved notably to 2.58 in 2019, then declined to 1.93 in 2020 before recovering to 2.20 in 2021. This suggests fluctuations in short-term liquidity management.

Adjusted Current Assets

Adjusted current assets followed a pattern similar to current assets, increasing from 8,052 million US dollars in 2017 to a peak of 11,448 million US dollars in 2019. This was followed by a decline to 9,838 million US dollars in 2020 and a slight increase to 10,184 million US dollars in 2021, indicating adjustments have a consistent impact on asset evaluation.

Adjusted Current Ratio

The adjusted current ratio value mirrored the reported current ratio closely, starting at 2.31 in 2017, decreasing to 2.04 in 2018, rising to a peak of 2.60 in 2019, dropping to 1.95 in 2020, and increasing again to 2.24 in 2021. This ratio also reflects the fluctuating liquidity position across the years with adjustments considered.

The financial data over the five-year period reveals several notable trends in the company’s capital structure and leverage ratios.

Total Debt

Total debt increased significantly from 7,222 million USD in 2017 to a peak of 13,991 million USD in 2020, before decreasing to 12,479 million USD in 2021. This reflects an overall upward trend in borrowing or liabilities over the period, with a slight moderation in the last year.

Total Stryker Shareholders’ Equity

Shareholders’ equity also showed a steady increase, rising from 9,966 million USD in 2017 to 14,877 million USD in 2021. This indicates consistent growth in the company’s equity base, suggesting retained earnings or capital injections that strengthened the financial foundation.

Reported Debt to Equity Ratio

The reported debt to equity ratio increased from 0.72 in 2017 to 1.07 in 2020, indicating rising leverage and a higher proportion of debt relative to equity during these years. However, it decreased notably to 0.84 in 2021, reflecting a reduction in relative leverage and a strengthening equity position or deleveraging effort in the most recent year.

Adjusted Total Debt

Adjusted total debt values follow a similar pattern to reported total debt, increasing from 7,518 million USD in 2017 to a peak of 14,425 million USD in 2020, then reducing to 12,901 million USD in 2021. This adjusted figure likely accounts for additional liabilities or off-balance-sheet items, and the trend supports the observed increase and subsequent moderation in leverage.

Adjusted Total Shareholders’ Equity

Adjusted total shareholders’ equity showed consistent growth, rising from 9,803 million USD in 2017 to 13,352 million USD in 2021. The less pronounced growth compared to reported equity suggests some adjustments reduced the equity base but the overall trend remains upward, supporting financial stability.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio grew from 0.77 in 2017 to 1.22 in 2020, indicating an increasing reliance on debt financing relative to equity during that period. A notable decline to 0.97 in 2021 corresponds with the reduction in adjusted debt and increase in adjusted equity, signaling a partial reversal of the prior leverage increase.

Overall, the data reflects a period characterized by increased borrowing and leverage peaking around 2020, followed by a modest reduction in debt levels and leverage ratios in 2021. Equity consistently grew throughout the period, which helped to mitigate the rising leverage effects. The decreasing leverage ratios in 2021 suggest efforts to strengthen the balance sheet and reduce financial risk after a period of elevated debt levels.

Total Debt

The total debt increased consistently from 2017 through 2020, rising from $7,222 million to a peak of $13,991 million. In 2021, total debt decreased to $12,479 million, indicating a partial reduction in borrowings after a period of expansion.

Total Capital

Total capital exhibited a steady upward trend over the five years, growing from $17,188 million in 2017 to $27,356 million in 2021. The increase suggests an expansion in overall financing, encompassing both debt and equity sources.

Reported Debt to Capital Ratio

The reported debt to capital ratio rose from 0.42 in 2017 to a high of 0.52 in 2020, reflecting an increasing proportion of debt in the capital structure. In 2021, the ratio declined to 0.46, signaling a modest shift toward a more balanced capital structure or reduced leverage.

Adjusted Total Debt

Adjusted total debt followed a similar pattern to total debt, increasing from $7,518 million in 2017 to a peak of $14,425 million in 2020, before decreasing to $12,901 million in 2021. This measure confirms the trend observed in reported total debt.

Adjusted Total Capital

Adjusted total capital grew steadily from $17,321 million in 2017 to $26,253 million in 2021, mirroring the overall increase in total capital. The steady growth suggests consistent capital formation over the period.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio increased from 0.43 in 2017 to 0.55 in 2020, indicating that adjusted debt became a larger component of capital over time. A decrease to 0.49 in 2021 reflects a reduction in leverage, but still represents a higher leverage level than in earlier years.

Overall, the data indicate that the company increased its leverage steadily from 2017 to 2020, driven by rising debt levels outpacing capital growth. This leads to higher debt-to-capital ratios both reported and adjusted. However, in 2021, there is evidence of deleveraging with a decrease in total debt and a corresponding decline in leverage ratios, suggesting a potential strategic shift toward strengthening the capital structure.

The financial data demonstrate a consistent expansion in the total assets and shareholders’ equity of the company over the five-year period from 2017 to 2021. Total assets increased steadily from $22,197 million in 2017 to $34,631 million in 2021, indicating ongoing growth in the company’s asset base. Similarly, total shareholders’ equity showed a positive trend, rising from $9,966 million in 2017 to $14,877 million in 2021, reflecting strengthening equity capital.

The reported financial leverage ratio exhibited some fluctuations over the years. Starting at 2.23 in 2017, the ratio slightly increased to 2.32 in 2018 and further to 2.36 in 2019. It peaked at 2.62 in 2020, suggesting increased reliance on debt relative to equity during that year, before decreasing to 2.33 in 2021, nearly returning to the 2017 level. This fluctuation implies variations in the company’s financing structure, with a noticeable increase in leverage during 2020 followed by a partial reduction.

When considering the adjusted figures, a similar pattern emerges. Adjusted total assets increased from $22,269 million in 2017 to $33,038 million in 2021, while adjusted total shareholders’ equity rose from $9,803 million to $13,352 million over the same period. The adjusted financial leverage ratio, however, exhibited greater variability, starting at 2.27 in 2017, increasing to 2.55 in 2018, then slightly declining to 2.51 in 2019, before experiencing its highest point at 2.79 in 2020. This peak indicates a relatively higher level of leverage compared to the reported ratio's peak. By 2021, the adjusted leverage ratio decreased to 2.47, remaining elevated relative to the initial year.

Overall, the data indicate positive growth in both assets and equity, with leverage ratios reflecting a generally increasing but fluctuating use of financial leverage. The peak in leverage during 2020 corresponds possibly to strategic financing decisions or external factors influencing capital structure. The subsequent decrease in leverage ratios in 2021 suggests a moderation in financial risk or a rebalancing towards equity financing.

Total Assets

Consistent increase year-over-year, with a cumulative growth of approximately 56% over five years.

Total Shareholders’ Equity

Steady upward trend, increasing by nearly 49% from 2017 to 2021, supporting asset growth.

Reported Financial Leverage

Fluctuated between 2.23 and 2.62, with a peak in 2020 indicating higher debt reliance that year, followed by a reduction.

Adjusted Total Assets and Equity

Mirrored reported values with slight variations, confirming robust asset and equity growth.

Adjusted Financial Leverage

Showed greater variance than the reported ratio, peaking at 2.79 in 2020 and remaining above the 2017 baseline in 2021.

The financial data presents several notable trends and variances over the five-year period analyzed.

Net Earnings

The net earnings exhibit significant volatility. Starting with a modest level of 1,020 million US dollars in 2017, there is a sharp increase to 3,553 million in 2018, followed by a decline to 2,083 million in 2019. The downward trend continues in 2020, reaching 1,599 million, before a moderate rebound to 1,994 million in 2021. This pattern suggests fluctuations that may be attributable to external market conditions or internal operational challenges.

Net Sales

Net sales show a generally upward trajectory across the period. From 12,444 million US dollars in 2017, sales steadily increase each year with only a slight dip in 2020 (14,351 million compared to 14,884 million in 2019), possibly due to extraordinary events reducing demand or operational capacity. The recovery is strong in 2021, reaching 17,108 million, the highest across all years, indicating successful sales growth or market expansion initiatives.

Reported Net Profit Margin

The reported net profit margin closely mirrors net earnings trends, demonstrating high variability. It rises sharply from 8.2% in 2017 to a peak of 26.12% in 2018, indicating an exceptionally profitable year. However, this margin declines steeply to 13.99% in 2019 and continues to fall to 11.14% in 2020, with a slight improvement to 11.66% in 2021. The margins indicate fluctuating profitability relative to sales, which may reflect cost management issues or pricing pressures.

Adjusted Net Earnings

Adjusted net earnings show a different pattern with less volatility. They increase from 1,267 million in 2017 to 1,898 million in 2018 and continue rising to 2,258 million in 2019. A sharp decline in 2020 to 1,139 million aligns with the overall profitability dip seen in other metrics. Interestingly, there is a strong recovery in 2021 to 2,419 million, surpassing all prior years, suggesting effective adjustment for one-time items and a return to underlying operational strength.

Adjusted Net Profit Margin

The adjusted net profit margin increases gradually from 10.18% in 2017 to 15.17% in 2019, indicating improving core profitability over these years. There is a notable contraction to 7.94% in 2020, consistent with the earnings decline that year. The margin rebounds to 14.14% in 2021, reflecting restored profitability adjusted for non-recurring items, and emphasizing the impact of exceptional circumstances on the 2020 results.

Overall, the data reveals cycles of growth and contraction with significant influence from extraordinary factors impacting 2018 and 2020. Sales exhibit a strong overall upward trend, although profitability margins and earnings reveal more instability. Adjusted measures suggest a more stable underlying performance once non-recurring elements are excluded, demonstrating resilience and recovery potential toward the end of the period.

Net earnings

The net earnings demonstrated significant volatility over the analyzed period. Starting at 1,020 million USD in 2017, there was a substantial increase to 3,553 million USD in 2018, followed by a decline in subsequent years to 2,083 million USD in 2019 and 1,599 million USD in 2020. A recovery trend is noted in 2021, with net earnings rising to 1,994 million USD.

Total shareholders’ equity

A steady upward trend is observed in total shareholders' equity, increasing consistently from 9,966 million USD in 2017 to 14,877 million USD in 2021. This suggests ongoing capital accumulation and strengthening of the company’s equity base over the period.

Reported Return on Equity (ROE)

The reported ROE exhibited considerable fluctuation. Starting at 10.23% in 2017, it peaked sharply at 30.29% in 2018, then tapered off to 16.26% in 2019, falling further to 12.22% in 2020. There is a modest increase in 2021, reaching 13.4%. This pattern reflects variability in profitability relative to shareholder equity.

Adjusted net earnings

Adjusted net earnings showed an overall positive trend with some fluctuations. Beginning at 1,267 million USD in 2017, the figure rose to 1,898 million USD in 2018 and 2,258 million USD in 2019. A notable decline occurred in 2020 to 1,139 million USD, followed by a strong rebound in 2021 to 2,419 million USD, the highest adjusted earnings in the timeframe.

Adjusted total shareholders’ equity

Adjusted shareholders’ equity increased steadily from 9,803 million USD in 2017 to 13,352 million USD in 2021. This consistent growth mirrors the trend in reported equity, indicating a solid equity foundation after adjusting for specific items.

Adjusted Return on Equity (ROE)

Adjusted ROE rose from 12.92% in 2017 to 18.66% in 2018 and further to 19.76% in 2019, representing improved adjusted profitability relative to equity. However, there was a sharp decrease in 2020 to 9.65%, reflecting the decline in adjusted earnings. The adjusted ROE strongly recovered in 2021, reaching 18.12%.

Net Earnings

Net earnings exhibited significant variability over the five-year period. Starting at 1020 million US dollars in 2017, they peaked at 3553 million in 2018. This was followed by a decline to 2083 million in 2019, and a further decrease to 1599 million in 2020. A moderate recovery occurred in 2021, with net earnings rising to 1994 million.

Total Assets

Total assets showed a consistent upward trend, increasing from 22197 million US dollars in 2017 to 34631 million in 2021. This steady growth suggests ongoing asset accumulation and potential expansion or capital investment activities.

Reported Return on Assets (ROA)

The reported ROA mirrored the fluctuations in net earnings, beginning at 4.6% in 2017 and surging to 13.05% in 2018, aligning with the peak in net earnings that year. Subsequently, there was a sharp decline to 6.9% in 2019, then a drop to 4.66% in 2020, followed by a slight recovery to 5.76% in 2021. These changes indicate variations in profitability efficiency relative to asset base.

Adjusted Net Earnings

Adjusted net earnings followed a different pattern compared to reported net earnings. They rose steadily from 1267 million US dollars in 2017 to 2258 million in 2019, then sharply declined to 1139 million in 2020, before rebounding to the highest level in the period of 2419 million in 2021. This suggests adjustments may have smoothed some volatility seen in reported earnings.

Adjusted Total Assets

Adjusted total assets increased progressively from 22269 million US dollars in 2017 to 33038 million in 2021. The trend is consistent with that of reported total assets, indicating steady asset growth regardless of adjustment methodology.

Adjusted Return on Assets (ROA)

The adjusted ROA showed relative stability with fluctuations. It increased from 5.69% in 2017 to 7.87% in 2019, then declined notably to 3.46% in 2020. A strong recovery followed in 2021, reaching 7.32%. This pattern indicates that adjusted profitability relative to the asset base was more stable than the reported ROA, although it still experienced a significant dip in 2020.