Stock Analysis on Net
Stock Analysis on Net

McKesson Corp. (NYSE:MCK)

This company has been moved to the archive! The financial data has not been updated since October 27, 2016.

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

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

US$ in millions

Microsoft Excel
12 months ended: Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
Federal 658 453 484 (85) 271 283
State 96 90 64 14 52 40
Foreign 90 101 178 46 28 54
Current 844 644 726 (25) 351 377
Federal 95 195 24 542 129 121
State 42 53 10 80 29 1
Foreign (73) (77) (18) (16) 7 6
Deferred 64 171 16 606 165 128
Income tax expense 908 815 742 581 516 505

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. McKesson Corp. current decreased from 2014 to 2015 but then increased from 2015 to 2016 exceeding 2014 level.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. McKesson Corp. deferred increased from 2014 to 2015 but then slightly decreased from 2015 to 2016 not reaching 2014 level.
Income tax expense Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. McKesson Corp. income tax expense increased from 2014 to 2015 and from 2015 to 2016.

Components of Deferred Tax Assets and Liabilities

McKesson Corp., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
Receivable allowances 110 83 106 84 44 48
Deferred revenue 77 72 136 106 114 107
Compensation and benefit related accruals 710 681 641 553 447 409
Net operating loss and credit carryforwards 367 316 430 341 400 494
Other 275 266 289 281 431 338
Subtotal 1,539 1,418 1,602 1,365 1,436 1,396
Valuation allowance (267) (229) (270) (118) (101) (99)
Assets 1,272 1,189 1,332 1,247 1,335 1,297
Inventory valuation and other assets (2,619) (2,333) (2,163) (2,089) (1,635) (1,450)
Fixed assets and systems development costs (326) (324) (321) (267) (263) (221)
Intangibles (981) (1,073) (1,531) (734) (544) (532)
Other (21) (61) (118) (24) (53) (58)
Liabilities (3,947) (3,791) (4,133) (3,114) (2,495) (2,261)
Net deferred tax asset (liability) (2,675) (2,602) (2,801) (1,867) (1,160) (964)

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

Item Description The company
Subtotal Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. McKesson Corp. subtotal decreased from 2014 to 2015 but then increased from 2015 to 2016 not reaching 2014 level.
Assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. McKesson Corp. assets decreased from 2014 to 2015 but then increased from 2015 to 2016 not reaching 2014 level.
Net deferred 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. McKesson Corp. net deferred tax asset (liability) increased from 2014 to 2015 but then slightly decreased from 2015 to 2016.

Deferred Tax Assets and Liabilities, Classification

McKesson Corp., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
Current net deferred tax asset — 26 51 16 — —
Current net deferred tax liability — 1,819 1,588 1,626 1,092 1,036
Long-term deferred tax asset 59 50 19 21 20 72
Long-term deferred tax liability 2,734 859 1,283 278 88 —

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

Item Description The company
Long-term deferred tax asset 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. McKesson Corp. long-term deferred tax asset increased from 2014 to 2015 and from 2015 to 2016.
Long-term deferred tax liability Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. McKesson Corp. long-term deferred tax liability decreased from 2014 to 2015 but then increased from 2015 to 2016 exceeding 2014 level.

Adjustments to Financial Statements: Removal of Deferred Taxes

McKesson Corp., adjustments to financial statements

US$ in millions

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
Adjustment to Current Assets
Current assets (as reported) 38,437 36,670 32,573 23,170 23,603 22,357
Less: Current deferred tax assets, net — 26 51 16 — —
Current assets (adjusted) 38,437 36,644 32,522 23,154 23,603 22,357
Adjustment to Total Assets
Total assets (as reported) 56,563 53,870 51,759 34,786 33,093 30,886
Less: Current deferred tax assets, net — 26 51 16 — —
Less: Noncurrent deferred tax assets, net 59 50 19 21 20 72
Total assets (adjusted) 56,504 53,794 51,689 34,749 33,073 30,814
Adjustment to Current Liabilities
Current liabilities (as reported) 35,071 33,497 29,501 21,357 21,686 18,726
Less: Current deferred tax liabilities, net — 1,819 1,588 1,626 1,092 1,036
Current liabilities (adjusted) 35,071 31,678 27,913 19,731 20,594 17,690
Adjustment to Total Liabilities
Total liabilities (as reported) 46,149 44,399 41,441 27,716 26,262 23,666
Less: Current deferred tax liabilities, net — 1,819 1,588 1,626 1,092 1,036
Less: Noncurrent deferred tax liabilities, net 2,734 859 1,283 278 88 —
Total liabilities (adjusted) 43,415 41,721 38,570 25,812 25,082 22,630
Adjustment to Total McKesson Corporation Stockholders’ Equity
Total McKesson Corporation stockholders’ equity (as reported) 8,924 8,001 8,522 7,070 6,831 7,220
Less: Net deferred tax assets (liabilities) (2,675) (2,602) (2,801) (1,867) (1,160) (964)
Total McKesson Corporation stockholders’ equity (adjusted) 11,599 10,603 11,323 8,937 7,991 8,184
Adjustment to Net Income Attributable To McKesson Corporation
Net income attributable to McKesson Corporation (as reported) 2,258 1,476 1,263 1,338 1,403 1,202
Add: Deferred income tax expense (benefit) 64 171 16 606 165 128
Net income attributable to McKesson Corporation (adjusted) 2,322 1,647 1,279 1,944 1,568 1,330

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

McKesson Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

McKesson Corp., adjusted financial ratios

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
Current Ratio
Reported current ratio 1.10 1.09 1.10 1.08 1.09 1.19
Adjusted current ratio 1.10 1.16 1.17 1.17 1.15 1.26
Net Profit Margin
Reported net profit margin 1.18% 0.82% 0.92% 1.09% 1.14% 1.07%
Adjusted net profit margin 1.22% 0.92% 0.93% 1.59% 1.28% 1.19%
Total Asset Turnover
Reported total asset turnover 3.37 3.32 2.66 3.52 3.71 3.63
Adjusted total asset turnover 3.38 3.33 2.66 3.52 3.71 3.64
Financial Leverage
Reported financial leverage 6.34 6.73 6.07 4.92 4.84 4.28
Adjusted financial leverage 4.87 5.07 4.56 3.89 4.14 3.77
Return on Equity (ROE)
Reported ROE 25.30% 18.45% 14.82% 18.93% 20.54% 16.65%
Adjusted ROE 20.02% 15.53% 11.30% 21.75% 19.62% 16.25%
Return on Assets (ROA)
Reported ROA 3.99% 2.74% 2.44% 3.85% 4.24% 3.89%
Adjusted ROA 4.11% 3.06% 2.47% 5.59% 4.74% 4.32%

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. McKesson Corp. adjusted current ratio deteriorated from 2014 to 2015 and from 2015 to 2016.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. McKesson Corp. adjusted net profit margin ratio deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. McKesson Corp. adjusted total asset turnover ratio improved from 2014 to 2015 and from 2015 to 2016.
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.		 McKesson Corp. adjusted financial leverage ratio increased from 2014 to 2015 but then slightly decreased from 2015 to 2016.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. McKesson Corp. adjusted ROE improved from 2014 to 2015 and from 2015 to 2016.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. McKesson Corp. adjusted ROA improved from 2014 to 2015 and from 2015 to 2016.

McKesson Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Current assets 38,437 36,670 32,573 23,170 23,603 22,357
Current liabilities 35,071 33,497 29,501 21,357 21,686 18,726
Liquidity Ratio
Current ratio1 1.10 1.09 1.10 1.08 1.09 1.19
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted current assets 38,437 36,644 32,522 23,154 23,603 22,357
Adjusted current liabilities 35,071 31,678 27,913 19,731 20,594 17,690
Liquidity Ratio
Adjusted current ratio2 1.10 1.16 1.17 1.17 1.15 1.26

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

2016 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 38,437 ÷ 35,071 = 1.10

2 Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= 38,437 ÷ 35,071 = 1.10

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. McKesson Corp. adjusted current ratio deteriorated from 2014 to 2015 and from 2015 to 2016.

Adjusted Net Profit Margin

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to McKesson Corporation 2,258 1,476 1,263 1,338 1,403 1,202
Revenues 190,884 179,045 137,609 122,455 122,734 112,084
Profitability Ratio
Net profit margin1 1.18% 0.82% 0.92% 1.09% 1.14% 1.07%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to McKesson Corporation 2,322 1,647 1,279 1,944 1,568 1,330
Revenues 190,884 179,045 137,609 122,455 122,734 112,084
Profitability Ratio
Adjusted net profit margin2 1.22% 0.92% 0.93% 1.59% 1.28% 1.19%

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

2016 Calculations

1 Net profit margin = 100 × Net income attributable to McKesson Corporation ÷ Revenues
= 100 × 2,258 ÷ 190,884 = 1.18%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to McKesson Corporation ÷ Revenues
= 100 × 2,322 ÷ 190,884 = 1.22%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. McKesson Corp. adjusted net profit margin ratio deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level.

Adjusted Total Asset Turnover

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Revenues 190,884 179,045 137,609 122,455 122,734 112,084
Total assets 56,563 53,870 51,759 34,786 33,093 30,886
Activity Ratio
Total asset turnover1 3.37 3.32 2.66 3.52 3.71 3.63
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenues 190,884 179,045 137,609 122,455 122,734 112,084
Adjusted total assets 56,504 53,794 51,689 34,749 33,073 30,814
Activity Ratio
Adjusted total asset turnover2 3.38 3.33 2.66 3.52 3.71 3.64

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

2016 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 190,884 ÷ 56,563 = 3.37

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 190,884 ÷ 56,504 = 3.38

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. McKesson Corp. adjusted total asset turnover ratio improved from 2014 to 2015 and from 2015 to 2016.

Adjusted Financial Leverage

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Total assets 56,563 53,870 51,759 34,786 33,093 30,886
Total McKesson Corporation stockholders’ equity 8,924 8,001 8,522 7,070 6,831 7,220
Solvency Ratio
Financial leverage1 6.34 6.73 6.07 4.92 4.84 4.28
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 56,504 53,794 51,689 34,749 33,073 30,814
Adjusted total McKesson Corporation stockholders’ equity 11,599 10,603 11,323 8,937 7,991 8,184
Solvency Ratio
Adjusted financial leverage2 4.87 5.07 4.56 3.89 4.14 3.77

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

2016 Calculations

1 Financial leverage = Total assets ÷ Total McKesson Corporation stockholders’ equity
= 56,563 ÷ 8,924 = 6.34

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total McKesson Corporation stockholders’ equity
= 56,504 ÷ 11,599 = 4.87

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.		 McKesson Corp. adjusted financial leverage ratio increased from 2014 to 2015 but then slightly decreased from 2015 to 2016.

Adjusted Return on Equity (ROE)

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to McKesson Corporation 2,258 1,476 1,263 1,338 1,403 1,202
Total McKesson Corporation stockholders’ equity 8,924 8,001 8,522 7,070 6,831 7,220
Profitability Ratio
ROE1 25.30% 18.45% 14.82% 18.93% 20.54% 16.65%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to McKesson Corporation 2,322 1,647 1,279 1,944 1,568 1,330
Adjusted total McKesson Corporation stockholders’ equity 11,599 10,603 11,323 8,937 7,991 8,184
Profitability Ratio
Adjusted ROE2 20.02% 15.53% 11.30% 21.75% 19.62% 16.25%

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

2016 Calculations

1 ROE = 100 × Net income attributable to McKesson Corporation ÷ Total McKesson Corporation stockholders’ equity
= 100 × 2,258 ÷ 8,924 = 25.30%

2 Adjusted ROE = 100 × Adjusted net income attributable to McKesson Corporation ÷ Adjusted total McKesson Corporation stockholders’ equity
= 100 × 2,322 ÷ 11,599 = 20.02%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. McKesson Corp. adjusted ROE improved from 2014 to 2015 and from 2015 to 2016.

Adjusted Return on Assets (ROA)

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to McKesson Corporation 2,258 1,476 1,263 1,338 1,403 1,202
Total assets 56,563 53,870 51,759 34,786 33,093 30,886
Profitability Ratio
ROA1 3.99% 2.74% 2.44% 3.85% 4.24% 3.89%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to McKesson Corporation 2,322 1,647 1,279 1,944 1,568 1,330
Adjusted total assets 56,504 53,794 51,689 34,749 33,073 30,814
Profitability Ratio
Adjusted ROA2 4.11% 3.06% 2.47% 5.59% 4.74% 4.32%

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

2016 Calculations

1 ROA = 100 × Net income attributable to McKesson Corporation ÷ Total assets
= 100 × 2,258 ÷ 56,563 = 3.99%

2 Adjusted ROA = 100 × Adjusted net income attributable to McKesson Corporation ÷ Adjusted total assets
= 100 × 2,322 ÷ 56,504 = 4.11%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. McKesson Corp. adjusted ROA improved from 2014 to 2015 and from 2015 to 2016.