Inventories are stated at the lower of cost or market. Cost is determined using the last-in, first-out (LIFO) method for certain U.S. operations and the average-cost method for most other operations.
Source: Praxair Inc., Annual Report
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Praxair Inc., Statement of Financial Position, Inventory
USD $ in millions
| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
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Raw materials and supplies | |
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Work in process | |
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Finished goods | |
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Inventories | |
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Source: Based on data from Praxair Inc. Annual Reports
| Item | Description | The company |
|---|---|---|
| Raw materials and supplies | Aggregated amount of unprocessed materials to be used in manufacturing or production process and supplies that will be consumed. | Praxair Inc.'s raw materials and supplies increased from 2009 to 2010 and from 2010 to 2011. |
| Work in process | Carrying amount as of the balance sheet date of merchandise or goods which are partially completed, are generally comprised of raw materials, labor and factory overhead costs, and which require further materials, labor and overhead to be converted into finished goods, and which generally require the use of estimates to determine percentage complete and pricing. | Praxair Inc.'s work in process increased from 2009 to 2010 and from 2010 to 2011. |
| Finished goods | Carrying amount as of the balance sheet date of merchandise or goods held by the company that are readily available for sale. | Praxair Inc.'s finished goods increased from 2009 to 2010 and from 2010 to 2011. |
| Inventories | Carrying amount (lower of cost or market) as of the balance sheet date of inventories less all valuation and other allowances. Excludes noncurrent inventory balances (expected to remain on hand past one year or one operating cycle, if longer). | Praxair Inc.'s inventories increased from 2009 to 2010 and from 2010 to 2011. |
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Adjusting LIFO Inventory to FIFO (Current) Cost
USD $ in millions
| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
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| Adjustment to Inventories | ||||||
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Inventories at LIFO (as reported) | |
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Add: LIFO reserve, ending balance | |
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Inventories at FIFO (adjusted) | |
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| Adjustment to Current Assets | ||||||
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Current assets (as reported) | |
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Add: LIFO reserve, ending balance | |
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Current assets (adjusted) | |
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| Adjustment to Total Assets | ||||||
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Total assets (as reported) | |
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Add: LIFO reserve, ending balance | |
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Total assets (adjusted) | |
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| Adjustment to Praxair, Inc. Shareholders’ Equity | ||||||
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Praxair, Inc. shareholders’ equity (as reported) | |
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Add: LIFO reserve, ending balance | |
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Praxair, Inc. shareholders’ equity (adjusted) | |
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| Adjustment to Net Income, Praxair, Inc. | ||||||
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Net Income, Praxair, Inc. (as reported) | |
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Add: Increase (decrease) in LIFO reserve, ending balance | |
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Net Income, Praxair, Inc. (adjusted) | |
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Praxair Inc.'s inventory value on Dec 31, 2011 would be $467 (in millions) if the FIFO inventory method was used instead of LIFO. Praxair Inc.'s inventories, valued on a LIFO basis, on Dec 31, 2011 were $456 . Praxair Inc.'s inventories would have been $11 higher than reported on Dec 31, 2011 if the FIFO method had been used instead.
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Praxair Inc., adjusted ratios
| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| Current Ratio | ||||||
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Reported current ratio (LIFO) | |
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Adjusted current ratio (FIFO) | |
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| Net Profit Margin | ||||||
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Reported net profit margin (LIFO) | % |
% |
% |
% |
% |
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Adjusted net profit margin (FIFO) | % |
% |
% |
% |
% |
| Total Asset Turnover | ||||||
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Reported total asset turnover (LIFO) | |
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Adjusted total asset turnover (FIFO) | |
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| Financial Leverage | ||||||
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Reported financial leverage (LIFO) | |
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Adjusted financial leverage (FIFO) | |
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| Return on Equity (ROE) | ||||||
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Reported ROE (LIFO) | % |
% |
% |
% |
% |
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Adjusted ROE (FIFO) | % |
% |
% |
% |
% |
| Return on Assets (ROA) | ||||||
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Reported ROA (LIFO) | % |
% |
% |
% |
% |
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Adjusted ROA (FIFO) | % |
% |
% |
% |
% |
| Ratio | Description | The company |
|---|---|---|
| Adjusted current ratio | A liquidity ratio calculated as adjusted current assets divided by current liabilities. | Praxair Inc.'s adjusted current ratio deteriorated from 2009 to 2010 and from 2010 to 2011. |
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by revenue. | Praxair Inc.'s adjusted net profit margin deteriorated from 2009 to 2010 but then improved from 2010 to 2011 exceeding 2009 level. |
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Praxair Inc.'s adjusted total asset turnover improved from 2009 to 2010 and from 2010 to 2011. |
| 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. |
Praxair Inc.'s adjusted financial leverage declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level. |
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity. | Praxair Inc.'s adjusted ROE deteriorated from 2009 to 2010 but then improved from 2010 to 2011 exceeding 2009 level. |
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by adjusted total assets. | Praxair Inc.'s adjusted ROA deteriorated from 2009 to 2010 but then improved from 2010 to 2011 exceeding 2009 level. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Current assets (USD $ in millions) | |
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Current liabilities (USD $ in millions) | |
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Current ratio1 | |
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| Adjusted: from LIFO to FIFO | ||||||
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Adjusted current assets (USD $ in millions) | |
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Current liabilities (USD $ in millions) | |
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Adjusted current ratio2 | |
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2011 Calculations
1 Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted current ratio | A liquidity ratio calculated as adjusted current assets divided by current liabilities. | Praxair Inc.'s adjusted current ratio deteriorated from 2009 to 2010 and from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Net Income, Praxair, Inc. (USD $ in millions) | |
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Sales (USD $ in millions) | |
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Net profit margin1 | % |
% |
% |
% |
% |
| Adjusted: from LIFO to FIFO | ||||||
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Adjusted net Income, Praxair, Inc. (USD $ in millions) | |
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Sales (USD $ in millions) | |
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Adjusted net profit margin2 | % |
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2011 Calculations
1 Net profit margin = 100 × Net Income, Praxair, Inc. ÷ Sales
= 100 × ÷ = %
2 Adjusted net profit margin = 100 × Adjusted net Income, Praxair, Inc. ÷ Sales
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by revenue. | Praxair Inc.'s adjusted net profit margin deteriorated from 2009 to 2010 but then improved from 2010 to 2011 exceeding 2009 level. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Sales (USD $ in millions) | |
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Total assets (USD $ in millions) | |
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Total asset turnover1 | |
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| Adjusted: from LIFO to FIFO | ||||||
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Sales (USD $ in millions) | |
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Adjusted total assets (USD $ in millions) | |
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Adjusted total asset turnover2 | |
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2011 Calculations
1 Total asset turnover = Sales ÷ Total assets
= ÷ =
2 Adjusted total asset turnover = Sales ÷ Adjusted total assets
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Praxair Inc.'s adjusted total asset turnover improved from 2009 to 2010 and from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Total assets (USD $ in millions) | |
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Praxair, Inc. shareholders’ equity (USD $ in millions) | |
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Financial leverage1 | |
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| Adjusted: from LIFO to FIFO | ||||||
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Adjusted total assets (USD $ in millions) | |
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Adjusted praxair, Inc. shareholders’ equity (USD $ in millions) | |
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Adjusted financial leverage2 | |
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2011 Calculations
1 Financial leverage = Total assets ÷ Praxair, Inc. shareholders’ equity
= ÷ =
2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted praxair, Inc. shareholders’ equity
= ÷ =
| 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. |
Praxair Inc.'s adjusted financial leverage declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Net Income, Praxair, Inc. (USD $ in millions) | |
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Praxair, Inc. shareholders’ equity (USD $ in millions) | |
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ROE1 | % |
% |
% |
% |
% |
| Adjusted: from LIFO to FIFO | ||||||
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Adjusted net Income, Praxair, Inc. (USD $ in millions) | |
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Adjusted praxair, Inc. shareholders’ equity (USD $ in millions) | |
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Adjusted ROE2 | % |
% |
% |
% |
% |
2011 Calculations
1 ROE = 100 × Net Income, Praxair, Inc. ÷ Praxair, Inc. shareholders’ equity
= 100 × ÷ = %
2 Adjusted ROE = 100 × Adjusted net Income, Praxair, Inc. ÷ Adjusted praxair, Inc. shareholders’ equity
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity. | Praxair Inc.'s adjusted ROE deteriorated from 2009 to 2010 but then improved from 2010 to 2011 exceeding 2009 level. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Net Income, Praxair, Inc. (USD $ in millions) | |
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Total assets (USD $ in millions) | |
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ROA1 | % |
% |
% |
% |
% |
| Adjusted: from LIFO to FIFO | ||||||
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Adjusted net Income, Praxair, Inc. (USD $ in millions) | |
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Adjusted total assets (USD $ in millions) | |
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Adjusted ROA2 | % |
% |
% |
% |
% |
2011 Calculations
1 ROA = 100 × Net Income, Praxair, Inc. ÷ Total assets
= 100 × ÷ = %
2 Adjusted ROA = 100 × Adjusted net Income, Praxair, Inc. ÷ Adjusted total assets
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by adjusted total assets. | Praxair Inc.'s adjusted ROA deteriorated from 2009 to 2010 but then improved from 2010 to 2011 exceeding 2009 level. |
May 24, 2012