Stock Analysis on Net
Stock Analysis on Net

Emerson Electric Co. (NYSE:EMR)

This company has been moved to the archive! The financial data has not been updated since April 24, 2020.

Analysis of Income Taxes

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Income Tax Expense (Benefit)

Emerson Electric Co., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
U.S. federal 247 341 351 394 904 742
State and local 24 52 40 11 106 59
Non-U.S. 308 300 311 305 447 516
Current 579 693 702 710 1,457 1,317
U.S. federal (2) (224) 7 2 31 (129)
State and local 12 (11) 4 4 — (5)
Non-U.S. (58) (15) (53) (19) (60) (19)
Deferred (48) (250) (42) (13) (29) (153)
Income tax expense 531 443 660 697 1,428 1,164

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Emerson Electric Co. current decreased from 2017 to 2018 and from 2018 to 2019.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Emerson Electric Co. deferred decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.
Income tax expense Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Emerson Electric Co. income tax expense decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

Effective Income Tax Rate (EITR)

Emerson Electric Co., effective income tax rate (EITR) reconciliation

Microsoft Excel
Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
U.S. federal statutory tax rate 21.00% 24.50% 35.00% 35.00% 35.00% 35.00%
State and local taxes, net of U.S. federal tax benefit 1.00% 1.20% 1.20% 0.50% 1.00% 1.00%
Non-U.S. rate differential 1.80% 0.80% -3.60% -2.90% -2.40% -4.20%
Non-U.S. tax holidays -1.10% -0.80% -1.00% -1.10% -1.10% -1.10%
U.S. manufacturing deduction 0.00% -1.10% -1.70% -1.80% -1.20% -1.50%
Foreign derived intangible income -1.10% 0.00% 0.00% 0.00% 0.00% 0.00%
Gains on divestitures 0.00% 1.00% 0.00% 0.00% 1.50% 0.00%
Subsidiary restructuring -2.60% -2.00% -1.80% 0.00% 0.00% 0.00%
Spinoff-related 0.00% 0.00% 0.00% 0.00% 1.10% 0.00%
Goodwill impairment 0.00% 0.00% 0.00% 0.00% 0.00% 5.30%
Other -0.40% 0.10% 0.20% 0.40% 0.40% 0.30%
Effective income tax rate, before transition impact of Tax Act 18.60% 23.70% 28.30% 30.10% 34.30% 34.80%
Transition impact of Tax Act 0.00% -7.10% 0.00% 0.00% 0.00% 0.00%
Effective income tax rate 18.60% 16.60% 28.30% 30.10% 34.30% 34.80%

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

Item Description The company
Effective income tax rate, before transition impact of Tax Act Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Emerson Electric Co. effective income tax rate, before transition impact of Tax Act decreased from 2017 to 2018 and from 2018 to 2019.

Components of Deferred Tax Assets and Liabilities

Emerson Electric Co., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
Net operating losses and tax credits 407 396 444 164 207 238
Accrued liabilities 228 238 319 277 270 311
Postretirement and postemployment benefits 36 37 70 82 86 93
Employee compensation and benefits 110 119 173 206 180 196
Pensions 95 — 72 271 194 28
Other 121 151 196 158 173 137
Deferred tax assets, gross 997 941 1,274 1,158 1,110 1,003
Valuation allowances (307) (341) (309) (132) (160) (154)
Deferred tax assets, net 690 600 965 1,026 950 849
Intangibles (637) (693) (753) (510) (648) (649)
Pensions — (43) — — — —
Property, plant and equipment (195) (187) (265) (239) (260) (258)
Undistributed non-U.S. earnings (49) (52) (249) (9) — —
Other (39) (35) (37) (42) (51) (98)
Deferred tax liabilities (920) (1,010) (1,304) (800) (959) (1,005)
Net deferred income tax asset (liability) (230) (410) (339) 226 (9) (156)

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

Item Description The company
Deferred tax assets, gross Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Emerson Electric Co. deferred tax assets, gross decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.
Deferred tax assets, net Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Emerson Electric Co. deferred tax assets, net decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.
Net deferred income tax asset (liability) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Emerson Electric Co. net deferred income tax asset (liability) decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.

Deferred Tax Assets and Liabilities, Classification

Emerson Electric Co., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
Current deferred tax assets, net — — — 400 353 354
Noncurrent deferred tax assets 97 74 86 — — 62
Noncurrent deferred tax liabilities 327 484 425 174 362 572

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

Item Description The company
Noncurrent deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Emerson Electric Co. noncurrent deferred tax assets decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Noncurrent deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Emerson Electric Co. noncurrent deferred tax liabilities increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

Adjustments to Financial Statements: Removal of Deferred Taxes

Emerson Electric Co., adjustments to financial statements

US$ in millions

Microsoft Excel
Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
Adjustment to Current Assets
Current assets (as reported) 7,139 6,619 8,252 9,960 10,049 10,867
Less: Current deferred tax assets, net — — — 400 353 354
Current assets (adjusted) 7,139 6,619 8,252 9,560 9,696 10,513
Adjustment to Total Assets
Total assets (as reported) 20,497 20,390 19,589 21,743 22,088 24,177
Less: Current deferred tax assets, net — — — 400 353 354
Less: Noncurrent deferred tax assets, net 97 74 86 — — 62
Total assets (adjusted) 20,400 20,316 19,503 21,343 21,735 23,761
Adjustment to Total Liabilities
Total liabilities (as reported) 12,224 11,400 10,819 14,125 13,960 14,010
Less: Noncurrent deferred tax liabilities, net 327 484 425 174 362 572
Total liabilities (adjusted) 11,897 10,916 10,394 13,951 13,598 13,438
Adjustment to Common Stockholders’ Equity
Common stockholders’ equity (as reported) 8,233 8,947 8,718 7,568 8,081 10,119
Less: Net deferred tax assets (liabilities) (230) (410) (339) 226 (9) (156)
Common stockholders’ equity (adjusted) 8,463 9,357 9,057 7,342 8,090 10,275
Adjustment to Net Earnings Common Stockholders
Net earnings common stockholders (as reported) 2,306 2,203 1,518 1,635 2,710 2,147
Add: Deferred income tax expense (benefit) (48) (250) (42) (13) (29) (153)
Net earnings common stockholders (adjusted) 2,258 1,953 1,476 1,622 2,681 1,994

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

Emerson Electric Co., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Emerson Electric Co., adjusted financial ratios

Microsoft Excel
Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
Current Ratio
Reported current ratio 1.19 1.07 1.64 1.24 1.29 1.29
Adjusted current ratio 1.19 1.07 1.64 1.19 1.24 1.24
Net Profit Margin
Reported net profit margin 12.55% 12.66% 9.94% 11.26% 12.15% 8.75%
Adjusted net profit margin 12.29% 11.22% 9.67% 11.17% 12.02% 8.13%
Total Asset Turnover
Reported total asset turnover 0.90 0.85 0.78 0.67 1.01 1.01
Adjusted total asset turnover 0.90 0.86 0.78 0.68 1.03 1.03
Financial Leverage
Reported financial leverage 2.49 2.28 2.25 2.87 2.73 2.39
Adjusted financial leverage 2.41 2.17 2.15 2.91 2.69 2.31
Return on Equity (ROE)
Reported ROE 28.01% 24.62% 17.41% 21.60% 33.54% 21.22%
Adjusted ROE 26.68% 20.87% 16.30% 22.09% 33.14% 19.41%
Return on Assets (ROA)
Reported ROA 11.25% 10.80% 7.75% 7.52% 12.27% 8.88%
Adjusted ROA 11.07% 9.61% 7.57% 7.60% 12.33% 8.39%

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Emerson Electric Co. adjusted current ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Emerson Electric Co. adjusted net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Emerson Electric Co. adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Emerson Electric Co. adjusted financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Emerson Electric Co. adjusted ROE improved from 2017 to 2018 and from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Emerson Electric Co. adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.

Emerson Electric Co., Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Microsoft Excel
Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
As Reported
Selected Financial Data (US$ in millions)
Current assets 7,139 6,619 8,252 9,960 10,049 10,867
Current liabilities 5,976 6,164 5,045 8,008 7,800 8,454
Liquidity Ratio
Current ratio1 1.19 1.07 1.64 1.24 1.29 1.29
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted current assets 7,139 6,619 8,252 9,560 9,696 10,513
Current liabilities 5,976 6,164 5,045 8,008 7,800 8,454
Liquidity Ratio
Adjusted current ratio2 1.19 1.07 1.64 1.19 1.24 1.24

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

2019 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 7,139 ÷ 5,976 = 1.19

2 Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= 7,139 ÷ 5,976 = 1.19

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Emerson Electric Co. adjusted current ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.

Adjusted Net Profit Margin

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Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
As Reported
Selected Financial Data (US$ in millions)
Net earnings common stockholders 2,306 2,203 1,518 1,635 2,710 2,147
Net sales 18,372 17,408 15,264 14,522 22,304 24,537
Profitability Ratio
Net profit margin1 12.55% 12.66% 9.94% 11.26% 12.15% 8.75%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings common stockholders 2,258 1,953 1,476 1,622 2,681 1,994
Net sales 18,372 17,408 15,264 14,522 22,304 24,537
Profitability Ratio
Adjusted net profit margin2 12.29% 11.22% 9.67% 11.17% 12.02% 8.13%

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

2019 Calculations

1 Net profit margin = 100 × Net earnings common stockholders ÷ Net sales
= 100 × 2,306 ÷ 18,372 = 12.55%

2 Adjusted net profit margin = 100 × Adjusted net earnings common stockholders ÷ Net sales
= 100 × 2,258 ÷ 18,372 = 12.29%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Emerson Electric Co. adjusted net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Total Asset Turnover

Microsoft Excel
Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
As Reported
Selected Financial Data (US$ in millions)
Net sales 18,372 17,408 15,264 14,522 22,304 24,537
Total assets 20,497 20,390 19,589 21,743 22,088 24,177
Activity Ratio
Total asset turnover1 0.90 0.85 0.78 0.67 1.01 1.01
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales 18,372 17,408 15,264 14,522 22,304 24,537
Adjusted total assets 20,400 20,316 19,503 21,343 21,735 23,761
Activity Ratio
Adjusted total asset turnover2 0.90 0.86 0.78 0.68 1.03 1.03

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

2019 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 18,372 ÷ 20,497 = 0.90

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 18,372 ÷ 20,400 = 0.90

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Emerson Electric Co. adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Financial Leverage

Microsoft Excel
Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
As Reported
Selected Financial Data (US$ in millions)
Total assets 20,497 20,390 19,589 21,743 22,088 24,177
Common stockholders’ equity 8,233 8,947 8,718 7,568 8,081 10,119
Solvency Ratio
Financial leverage1 2.49 2.28 2.25 2.87 2.73 2.39
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 20,400 20,316 19,503 21,343 21,735 23,761
Adjusted common stockholders’ equity 8,463 9,357 9,057 7,342 8,090 10,275
Solvency Ratio
Adjusted financial leverage2 2.41 2.17 2.15 2.91 2.69 2.31

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

2019 Calculations

1 Financial leverage = Total assets ÷ Common stockholders’ equity
= 20,497 ÷ 8,233 = 2.49

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted common stockholders’ equity
= 20,400 ÷ 8,463 = 2.41

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Emerson Electric Co. adjusted financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Equity (ROE)

Microsoft Excel
Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
As Reported
Selected Financial Data (US$ in millions)
Net earnings common stockholders 2,306 2,203 1,518 1,635 2,710 2,147
Common stockholders’ equity 8,233 8,947 8,718 7,568 8,081 10,119
Profitability Ratio
ROE1 28.01% 24.62% 17.41% 21.60% 33.54% 21.22%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings common stockholders 2,258 1,953 1,476 1,622 2,681 1,994
Adjusted common stockholders’ equity 8,463 9,357 9,057 7,342 8,090 10,275
Profitability Ratio
Adjusted ROE2 26.68% 20.87% 16.30% 22.09% 33.14% 19.41%

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

2019 Calculations

1 ROE = 100 × Net earnings common stockholders ÷ Common stockholders’ equity
= 100 × 2,306 ÷ 8,233 = 28.01%

2 Adjusted ROE = 100 × Adjusted net earnings common stockholders ÷ Adjusted common stockholders’ equity
= 100 × 2,258 ÷ 8,463 = 26.68%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Emerson Electric Co. adjusted ROE improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel
Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014
As Reported
Selected Financial Data (US$ in millions)
Net earnings common stockholders 2,306 2,203 1,518 1,635 2,710 2,147
Total assets 20,497 20,390 19,589 21,743 22,088 24,177
Profitability Ratio
ROA1 11.25% 10.80% 7.75% 7.52% 12.27% 8.88%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings common stockholders 2,258 1,953 1,476 1,622 2,681 1,994
Adjusted total assets 20,400 20,316 19,503 21,343 21,735 23,761
Profitability Ratio
Adjusted ROA2 11.07% 9.61% 7.57% 7.60% 12.33% 8.39%

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

2019 Calculations

1 ROA = 100 × Net earnings common stockholders ÷ Total assets
= 100 × 2,306 ÷ 20,497 = 11.25%

2 Adjusted ROA = 100 × Adjusted net earnings common stockholders ÷ Adjusted total assets
= 100 × 2,258 ÷ 20,400 = 11.07%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Emerson Electric Co. adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.