Stock Analysis on Net
Stock Analysis on Net

Alphabet Inc. (NASDAQ:GOOG)

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Adjustments to Financial Statements: Removal of Goodwill

Alphabet Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 402,392 365,264 359,268 319,616 275,909
Less: Goodwill 29,198 28,960 22,956 21,175 20,624
Total assets (adjusted) 373,194 336,304 336,312 298,441 255,285
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 283,379 256,144 251,635 222,544 201,442
Less: Goodwill 29,198 28,960 22,956 21,175 20,624
Stockholders’ equity (adjusted) 254,181 227,184 228,679 201,369 180,818

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Alphabet Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Alphabet Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Total Asset Turnover
Reported total asset turnover 0.76 0.77 0.72 0.57 0.59
Adjusted total asset turnover 0.82 0.84 0.77 0.61 0.63
Financial Leverage
Reported financial leverage 1.42 1.43 1.43 1.44 1.37
Adjusted financial leverage 1.47 1.48 1.47 1.48 1.41
Return on Equity (ROE)
Reported ROE 26.04% 23.41% 30.22% 18.09% 17.05%
Adjusted ROE 29.03% 26.40% 33.25% 20.00% 18.99%
Return on Assets (ROA)
Reported ROA 18.34% 16.42% 21.16% 12.60% 12.45%
Adjusted ROA 19.77% 17.83% 22.61% 13.49% 13.45%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Alphabet Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.
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.		 Alphabet Inc. adjusted financial leverage ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Alphabet Inc. adjusted ROE deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Alphabet Inc. adjusted ROA deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Alphabet Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Revenues 307,394 282,836 257,637 182,527 161,857
Total assets 402,392 365,264 359,268 319,616 275,909
Activity Ratio
Total asset turnover1 0.76 0.77 0.72 0.57 0.59
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenues 307,394 282,836 257,637 182,527 161,857
Adjusted total assets 373,194 336,304 336,312 298,441 255,285
Activity Ratio
Adjusted total asset turnover2 0.82 0.84 0.77 0.61 0.63

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 307,394 ÷ 402,392 = 0.76

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 307,394 ÷ 373,194 = 0.82

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Alphabet Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets 402,392 365,264 359,268 319,616 275,909
Stockholders’ equity 283,379 256,144 251,635 222,544 201,442
Solvency Ratio
Financial leverage1 1.42 1.43 1.43 1.44 1.37
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 373,194 336,304 336,312 298,441 255,285
Adjusted stockholders’ equity 254,181 227,184 228,679 201,369 180,818
Solvency Ratio
Adjusted financial leverage2 1.47 1.48 1.47 1.48 1.41

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= 402,392 ÷ 283,379 = 1.42

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 373,194 ÷ 254,181 = 1.47

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.		 Alphabet Inc. adjusted financial leverage ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income 73,795 59,972 76,033 40,269 34,343
Stockholders’ equity 283,379 256,144 251,635 222,544 201,442
Profitability Ratio
ROE1 26.04% 23.41% 30.22% 18.09% 17.05%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income 73,795 59,972 76,033 40,269 34,343
Adjusted stockholders’ equity 254,181 227,184 228,679 201,369 180,818
Profitability Ratio
Adjusted ROE2 29.03% 26.40% 33.25% 20.00% 18.99%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 73,795 ÷ 283,379 = 26.04%

2 Adjusted ROE = 100 × Net income ÷ Adjusted stockholders’ equity
= 100 × 73,795 ÷ 254,181 = 29.03%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Alphabet Inc. adjusted ROE deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income 73,795 59,972 76,033 40,269 34,343
Total assets 402,392 365,264 359,268 319,616 275,909
Profitability Ratio
ROA1 18.34% 16.42% 21.16% 12.60% 12.45%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income 73,795 59,972 76,033 40,269 34,343
Adjusted total assets 373,194 336,304 336,312 298,441 255,285
Profitability Ratio
Adjusted ROA2 19.77% 17.83% 22.61% 13.49% 13.45%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 73,795 ÷ 402,392 = 18.34%

2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 73,795 ÷ 373,194 = 19.77%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Alphabet Inc. adjusted ROA deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.