Stock Analysis on Net
Stock Analysis on Net

GlaxoSmithKline PLC (NYSE:GSK)

This company has been moved to the archive! The financial data has not been updated since February 27, 2015.

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

GlaxoSmithKline PLC, balance sheet: goodwill and intangible assets

US$ in millions, translated from GBP £

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Computer software 2,999 2,635 2,378 2,054 1,752
Licences, patents, etc. 15,271 15,549 16,060 11,150 10,903
Amortised brands 453 462 460 211 580
Indefinite life brands 3,501 3,503 3,467 3,498 3,905
Other intangible assets, cost 22,224 22,149 22,365 16,913 17,140
Accumulated amortisation (8,173) (6,765) (5,840) (4,790) (4,008)
Other intangible assets, net book value 14,052 15,384 16,525 12,122 13,132
Goodwill 6,289 6,969 7,089 5,833 5,550
Goodwill and other intangible assets 20,341 22,353 23,614 17,955 18,682

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

Item Description The company
Other intangible assets, net book value Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. GlaxoSmithKline PLC other intangible assets, net book value decreased from 2012 to 2013 and from 2013 to 2014.
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. GlaxoSmithKline PLC goodwill decreased from 2012 to 2013 and from 2013 to 2014.
Goodwill and other intangible assets Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. GlaxoSmithKline PLC goodwill and other intangible assets decreased from 2012 to 2013 and from 2013 to 2014.

Adjustments to Financial Statements: Removal of Goodwill

GlaxoSmithKline PLC, adjustments to financial statements

US$ in millions, translated from GBP £

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Adjustment to Total Assets
Total assets (as reported) 68,656 69,748 67,450 63,828 64,999
Less: Goodwill 6,289 6,969 7,089 5,833 5,550
Total assets (adjusted) 62,366 62,779 60,361 57,996 59,449
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported) 7,200 11,596 9,449 12,480 13,679
Less: Goodwill 6,289 6,969 7,089 5,833 5,550
Shareholders’ equity (adjusted) 910 4,627 2,360 6,647 8,128
Adjustment to Profit Attributable To Shareholders
Profit attributable to shareholders (as reported) 4,655 9,009 7,424 8,174 2,515
Add: Goodwill impairment losses — — — — 15
Profit attributable to shareholders (adjusted) 4,655 9,009 7,424 8,174 2,530

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

GlaxoSmithKline PLC, Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

GlaxoSmithKline PLC, adjusted financial ratios

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Net Profit Margin
Reported net profit margin 11.98% 20.51% 17.27% 19.21% 5.76%
Adjusted net profit margin 11.98% 20.51% 17.27% 19.21% 5.79%
Total Asset Turnover
Reported total asset turnover 0.57 0.63 0.64 0.67 0.67
Adjusted total asset turnover 0.62 0.70 0.71 0.73 0.74
Financial Leverage
Reported financial leverage 9.54 6.01 7.14 5.11 4.75
Adjusted financial leverage 68.51 13.57 25.58 8.73 7.31
Return on Equity (ROE)
Reported ROE 64.65% 77.69% 78.57% 65.50% 18.39%
Adjusted ROE 511.32% 194.70% 314.61% 122.98% 31.13%
Return on Assets (ROA)
Reported ROA 6.78% 12.92% 11.01% 12.81% 3.87%
Adjusted ROA 7.46% 14.35% 12.30% 14.09% 4.26%

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. GlaxoSmithKline PLC adjusted net profit margin ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. GlaxoSmithKline PLC adjusted total asset turnover ratio deteriorated from 2012 to 2013 and from 2013 to 2014.
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.		 GlaxoSmithKline PLC adjusted financial leverage ratio decreased from 2012 to 2013 but then increased from 2013 to 2014 exceeding 2012 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. GlaxoSmithKline PLC adjusted ROE deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. GlaxoSmithKline PLC adjusted ROA improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

GlaxoSmithKline PLC, Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Profit attributable to shareholders 4,655 9,009 7,424 8,174 2,515
Turnover 38,855 43,926 42,984 42,553 43,700
Profitability Ratio
Net profit margin1 11.98% 20.51% 17.27% 19.21% 5.76%
Adjusted for Goodwill
Selected Financial Data (US$ in millions, translated from GBP £)
Adjusted profit attributable to shareholders 4,655 9,009 7,424 8,174 2,530
Turnover 38,855 43,926 42,984 42,553 43,700
Profitability Ratio
Adjusted net profit margin2 11.98% 20.51% 17.27% 19.21% 5.79%

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

2014 Calculations

1 Net profit margin = 100 × Profit attributable to shareholders ÷ Turnover
= 100 × 4,655 ÷ 38,855 = 11.98%

2 Adjusted net profit margin = 100 × Adjusted profit attributable to shareholders ÷ Turnover
= 100 × 4,655 ÷ 38,855 = 11.98%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. GlaxoSmithKline PLC adjusted net profit margin ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Turnover 38,855 43,926 42,984 42,553 43,700
Total assets 68,656 69,748 67,450 63,828 64,999
Activity Ratio
Total asset turnover1 0.57 0.63 0.64 0.67 0.67
Adjusted for Goodwill
Selected Financial Data (US$ in millions, translated from GBP £)
Turnover 38,855 43,926 42,984 42,553 43,700
Adjusted total assets 62,366 62,779 60,361 57,996 59,449
Activity Ratio
Adjusted total asset turnover2 0.62 0.70 0.71 0.73 0.74

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

2014 Calculations

1 Total asset turnover = Turnover ÷ Total assets
= 38,855 ÷ 68,656 = 0.57

2 Adjusted total asset turnover = Turnover ÷ Adjusted total assets
= 38,855 ÷ 62,366 = 0.62

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. GlaxoSmithKline PLC adjusted total asset turnover ratio deteriorated from 2012 to 2013 and from 2013 to 2014.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Total assets 68,656 69,748 67,450 63,828 64,999
Shareholders’ equity 7,200 11,596 9,449 12,480 13,679
Solvency Ratio
Financial leverage1 9.54 6.01 7.14 5.11 4.75
Adjusted for Goodwill
Selected Financial Data (US$ in millions, translated from GBP £)
Adjusted total assets 62,366 62,779 60,361 57,996 59,449
Adjusted shareholders’ equity 910 4,627 2,360 6,647 8,128
Solvency Ratio
Adjusted financial leverage2 68.51 13.57 25.58 8.73 7.31

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

2014 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity
= 68,656 ÷ 7,200 = 9.54

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 62,366 ÷ 910 = 68.51

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.		 GlaxoSmithKline PLC adjusted financial leverage ratio decreased from 2012 to 2013 but then increased from 2013 to 2014 exceeding 2012 level.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Profit attributable to shareholders 4,655 9,009 7,424 8,174 2,515
Shareholders’ equity 7,200 11,596 9,449 12,480 13,679
Profitability Ratio
ROE1 64.65% 77.69% 78.57% 65.50% 18.39%
Adjusted for Goodwill
Selected Financial Data (US$ in millions, translated from GBP £)
Adjusted profit attributable to shareholders 4,655 9,009 7,424 8,174 2,530
Adjusted shareholders’ equity 910 4,627 2,360 6,647 8,128
Profitability Ratio
Adjusted ROE2 511.32% 194.70% 314.61% 122.98% 31.13%

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

2014 Calculations

1 ROE = 100 × Profit attributable to shareholders ÷ Shareholders’ equity
= 100 × 4,655 ÷ 7,200 = 64.65%

2 Adjusted ROE = 100 × Adjusted profit attributable to shareholders ÷ Adjusted shareholders’ equity
= 100 × 4,655 ÷ 910 = 511.32%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. GlaxoSmithKline PLC adjusted ROE deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Profit attributable to shareholders 4,655 9,009 7,424 8,174 2,515
Total assets 68,656 69,748 67,450 63,828 64,999
Profitability Ratio
ROA1 6.78% 12.92% 11.01% 12.81% 3.87%
Adjusted for Goodwill
Selected Financial Data (US$ in millions, translated from GBP £)
Adjusted profit attributable to shareholders 4,655 9,009 7,424 8,174 2,530
Adjusted total assets 62,366 62,779 60,361 57,996 59,449
Profitability Ratio
Adjusted ROA2 7.46% 14.35% 12.30% 14.09% 4.26%

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

2014 Calculations

1 ROA = 100 × Profit attributable to shareholders ÷ Total assets
= 100 × 4,655 ÷ 68,656 = 6.78%

2 Adjusted ROA = 100 × Adjusted profit attributable to shareholders ÷ Adjusted total assets
= 100 × 4,655 ÷ 62,366 = 7.46%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. GlaxoSmithKline PLC adjusted ROA improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.