Stock Analysis on Net
Stock Analysis on Net

Adobe Inc. (NASDAQ:ADBE)

$19.99

Analysis of Income Taxes

Microsoft Excel LibreOffice Calc

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Income Tax Expense (Benefit)

Adobe Inc., income tax expense (benefit), continuing operations

US$ in millions

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12 months ended: Dec 3, 2021 Nov 27, 2020 Nov 29, 2019 Nov 30, 2018 Dec 1, 2017 Dec 2, 2016
United States federal
Foreign
State and local
Current
United States federal
Foreign
State and local
Deferred
Tax expense attributable to employee stock plans
Provision for (benefit from) income taxes

Based on: 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29), 10-K (reporting date: 2018-11-30), 10-K (reporting date: 2017-12-01), 10-K (reporting date: 2016-12-02).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Adobe Inc. current increased from 2019 to 2020 and from 2020 to 2021.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Adobe Inc. deferred decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.
Provision for (benefit from) income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Adobe Inc. provision for (benefit from) income taxes decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Effective Income Tax Rate (EITR)

Adobe Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel LibreOffice Calc
Dec 3, 2021 Nov 27, 2020 Nov 29, 2019 Nov 30, 2018 Dec 1, 2017 Dec 2, 2016
U.S. federal statutory tax rate
Effective income tax rate

Based on: 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29), 10-K (reporting date: 2018-11-30), 10-K (reporting date: 2017-12-01), 10-K (reporting date: 2016-12-02).

Item Description The company
Effective income tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Adobe Inc. effective income tax rate decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Components of Deferred Tax Assets and Liabilities

Adobe Inc., components of deferred tax assets and liabilities

US$ in millions

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Dec 3, 2021 Nov 27, 2020 Nov 29, 2019 Nov 30, 2018 Dec 1, 2017 Dec 2, 2016
Intangible assets
Capitalized expenses
Credit carryforwards
Operating lease liabilities
Net operating loss carryforwards of acquired companies
Stock-based compensation
Reserves and accruals
Benefits relating to tax positions
Other
Gross deferred tax assets
Valuation allowance
Deferred tax assets
Acquired intangible assets
Operating lease right-of-use assets
Prepaid expenses
Depreciation and amortization
Undistributed earnings of foreign subsidiaries
Deferred tax liabilities
Net deferred tax assets (liabilities)

Based on: 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29), 10-K (reporting date: 2018-11-30), 10-K (reporting date: 2017-12-01), 10-K (reporting date: 2016-12-02).

Item Description The company
Gross deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Adobe Inc. gross deferred tax assets increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Adobe Inc. deferred tax assets increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Adobe Inc. net deferred tax assets (liabilities) increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.

Deferred Tax Assets and Liabilities, Classification

Adobe Inc., deferred tax assets and liabilities, classification

US$ in millions

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Dec 3, 2021 Nov 27, 2020 Nov 29, 2019 Nov 30, 2018 Dec 1, 2017 Dec 2, 2016
Deferred tax assets
Deferred tax liabilities

Based on: 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29), 10-K (reporting date: 2018-11-30), 10-K (reporting date: 2017-12-01), 10-K (reporting date: 2016-12-02).

Item Description The company
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. Adobe Inc. deferred tax assets increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Adobe Inc. deferred tax liabilities decreased from 2019 to 2020 and from 2020 to 2021.

Adjustments to Financial Statements: Removal of Deferred Taxes

Adobe Inc., adjustments to financial statements

US$ in millions

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Dec 3, 2021 Nov 27, 2020 Nov 29, 2019 Nov 30, 2018 Dec 1, 2017 Dec 2, 2016
Adjustment to Total Assets
Total assets (as reported)
Less: Noncurrent deferred tax assets, net
Total assets (adjusted)
Adjustment to Total Liabilities
Total liabilities (as reported)
Less: Noncurrent deferred tax liabilities, net
Total liabilities (adjusted)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)
Less: Net deferred tax assets (liabilities)
Stockholders’ equity (adjusted)
Adjustment to Net Income
Net income (as reported)
Add: Deferred income tax expense (benefit)
Net income (adjusted)

Based on: 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29), 10-K (reporting date: 2018-11-30), 10-K (reporting date: 2017-12-01), 10-K (reporting date: 2016-12-02).

Adobe Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Adobe Inc., adjusted financial ratios

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Dec 3, 2021 Nov 27, 2020 Nov 29, 2019 Nov 30, 2018 Dec 1, 2017 Dec 2, 2016
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Total Asset Turnover
Reported total asset turnover
Adjusted total asset turnover
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29), 10-K (reporting date: 2018-11-30), 10-K (reporting date: 2017-12-01), 10-K (reporting date: 2016-12-02).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Adobe Inc. adjusted net profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Adobe Inc. adjusted total asset turnover ratio improved from 2019 to 2020 and from 2020 to 2021.
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.		 Adobe Inc. adjusted financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Adobe Inc. adjusted ROE improved from 2019 to 2020 and from 2020 to 2021.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Adobe Inc. adjusted ROA improved from 2019 to 2020 and from 2020 to 2021.

Adobe Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

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Dec 3, 2021 Nov 27, 2020 Nov 29, 2019 Nov 30, 2018 Dec 1, 2017 Dec 2, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income
Revenue
Profitability Ratio
Net profit margin1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income
Revenue
Profitability Ratio
Adjusted net profit margin2

Based on: 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29), 10-K (reporting date: 2018-11-30), 10-K (reporting date: 2017-12-01), 10-K (reporting date: 2016-12-02).

2021 Calculations

1 Net profit margin = 100 × Net income ÷ Revenue
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × ÷ =

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Adobe Inc. adjusted net profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.

Adjusted Total Asset Turnover

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Dec 3, 2021 Nov 27, 2020 Nov 29, 2019 Nov 30, 2018 Dec 1, 2017 Dec 2, 2016
As Reported
Selected Financial Data (US$ in millions)
Revenue
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenue
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29), 10-K (reporting date: 2018-11-30), 10-K (reporting date: 2017-12-01), 10-K (reporting date: 2016-12-02).

2021 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= ÷ =

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Adobe Inc. adjusted total asset turnover ratio improved from 2019 to 2020 and from 2020 to 2021.

Adjusted Financial Leverage

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Dec 3, 2021 Nov 27, 2020 Nov 29, 2019 Nov 30, 2018 Dec 1, 2017 Dec 2, 2016
As Reported
Selected Financial Data (US$ in millions)
Total assets
Stockholders’ equity
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted stockholders’ equity
Solvency Ratio
Adjusted financial leverage2

Based on: 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29), 10-K (reporting date: 2018-11-30), 10-K (reporting date: 2017-12-01), 10-K (reporting date: 2016-12-02).

2021 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= ÷ =

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.		 Adobe Inc. adjusted financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 3, 2021 Nov 27, 2020 Nov 29, 2019 Nov 30, 2018 Dec 1, 2017 Dec 2, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income
Stockholders’ equity
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income
Adjusted stockholders’ equity
Profitability Ratio
Adjusted ROE2

Based on: 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29), 10-K (reporting date: 2018-11-30), 10-K (reporting date: 2017-12-01), 10-K (reporting date: 2016-12-02).

2021 Calculations

1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted stockholders’ equity
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Adobe Inc. adjusted ROE improved from 2019 to 2020 and from 2020 to 2021.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 3, 2021 Nov 27, 2020 Nov 29, 2019 Nov 30, 2018 Dec 1, 2017 Dec 2, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income
Total assets
Profitability Ratio
ROA1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29), 10-K (reporting date: 2018-11-30), 10-K (reporting date: 2017-12-01), 10-K (reporting date: 2016-12-02).

2021 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Adobe Inc. adjusted ROA improved from 2019 to 2020 and from 2020 to 2021.