Baxter International Inc. — Earnings Quality Grade F
BAX · Healthcare
Major red flags
Screening Summary
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 60 days, change +3 days YoY
AR growth 10.8% exceeds revenue growth 5.7%
Revenue 5.7%, CFFO -17.1%. Cash follows revenue
Expense Quality
Inventory 9.1% vs COGS 18.2%. Normal
CapEx growth 13.5% vs revenue 5.7%. Normal
SG&A/Gross Profit = 85.5%, exceeds 70%
Gross margin swung -7.4pp (37.5% → 30.1%)
Cash Flow Quality
CFFO < Net Income for 3 consecutive years
FCF $0.3B, FCF/NI = -0.34
Accruals ratio = -9.0%. Low accruals
Cash $2.0B covers only 20% of debt $9.8B
Balance Sheet Health
Goodwill+Intangibles $9.3B = 152% of equity. Over 50%
Debt/EBITDA = 12.8x (>4x). Interest coverage = 0.6x (<2x). Financial stress
Other assets -92.6% vs revenue 5.7%. Normal
Write-offs normal
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles change -11% YoY. Normal
Manipulation Score
M-Score = -2.67 (< -2.22). Unlikely manipulator
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-09