Stock Analysis on Net
Stock Analysis on Net

Alphabet Inc. (NASDAQ:GOOG)

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

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

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Federal and state 17,125 17,120 10,126 4,789 2,424
Foreign 2,526 2,434 2,692 1,687 2,713
Current 19,651 19,554 12,818 6,476 5,137
Federal and state (7,482) (8,052) 2,018 1,552 286
Foreign (247) (146) (135) (215) (141)
Deferred (7,729) (8,198) 1,883 1,337 145
Provision for income taxes 11,922 11,356 14,701 7,813 5,282

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).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Alphabet Inc. current increased from 2021 to 2022 and from 2022 to 2023.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Alphabet Inc. deferred decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Alphabet Inc. provision for income taxes decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.

Effective Income Tax Rate (EITR)

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

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
U.S. federal statutory tax rate 21.00% 21.00% 21.00% 21.00% 21.00%
Foreign income taxed at different rates 0.30% 3.00% 0.20% -0.30% -4.90%
Foreign-derived intangible income deduction -4.60% -5.40% -2.50% -3.00% -0.70%
Stock-based compensation expense -0.80% -1.20% -2.50% -1.70% -0.70%
Federal research credit -1.80% -2.20% -1.60% -2.30% -2.50%
European Commission fine 0.00% 0.00% 0.00% 0.00% 1.00%
Deferred tax asset valuation allowance 0.60% 0.90% 0.60% 1.40% 0.00%
State and local income taxes 1.00% 0.80% 1.00% 1.10% 1.10%
Effect of tax law change -1.40% 0.00% 0.00% 0.00% 0.00%
Other -0.40% -1.00% 0.00% 0.00% -0.40%
Effective tax rate 13.90% 15.90% 16.20% 16.20% 13.90%

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).

Item Description The company
Effective tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Alphabet Inc. effective tax rate decreased from 2021 to 2022 and from 2022 to 2023.

Components of Deferred Tax Assets and Liabilities

Alphabet Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Accrued employee benefits 1,855 955 — — —
Accruals and reserves not currently deductible 2,481 1,956 1,816 1,049 1,047
Tax credit 6,609 6,002 5,179 3,723 3,264
Net operating losses 2,965 2,557 1,790 1,085 771
Operating leases 3,526 2,711 2,503 2,620 1,876
Capitalized research and development 17,757 10,381 1,843 — —
Other 1,951 2,289 1,665 3,086 1,274
Deferred tax assets 37,144 26,851 14,796 11,563 8,232
Valuation allowance (10,999) (9,553) (7,129) (4,823) (3,502)
Deferred tax assets net of valuation allowance 26,145 17,298 7,667 6,740 4,730
Property and equipment, net (8,189) (6,607) (5,237) (3,382) (1,798)
Net investment gains/losses (2,405) (2,361) (3,229) (1,901) (1,074)
Operating leases (2,965) (2,491) (2,228) (2,354) (1,619)
Other (902) (1,092) (946) (1,580) (1,219)
Deferred tax liabilities (14,461) (12,551) (11,640) (9,217) (5,710)
Net deferred tax assets (liabilities) 11,684 4,747 (3,973) (2,477) (980)

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).

Item Description The company
Deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Alphabet Inc. deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax assets net of valuation allowance Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Alphabet Inc. deferred tax assets net of valuation allowance increased from 2021 to 2022 and from 2022 to 2023.
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. Alphabet Inc. net deferred tax assets (liabilities) increased from 2021 to 2022 and from 2022 to 2023.

Deferred Tax Assets and Liabilities, Classification

Alphabet Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Deferred tax assets 12,169 5,261 1,284 1,084 721
Deferred tax liabilities 485 514 5,257 3,561 1,701

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).

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. Alphabet Inc. deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Alphabet Inc. deferred tax liabilities decreased from 2021 to 2022 and from 2022 to 2023.

Adjustments to Financial Statements: Removal of Deferred Taxes

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: Noncurrent deferred tax assets, net 12,169 5,261 1,284 1,084 721
Total assets (adjusted) 390,223 360,003 357,984 318,532 275,188
Adjustment to Total Liabilities
Total liabilities (as reported) 119,013 109,120 107,633 97,072 74,467
Less: Noncurrent deferred tax liabilities, net 485 514 5,257 3,561 1,701
Total liabilities (adjusted) 118,528 108,606 102,376 93,511 72,766
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 283,379 256,144 251,635 222,544 201,442
Less: Net deferred tax assets (liabilities) 11,684 4,747 (3,973) (2,477) (980)
Stockholders’ equity (adjusted) 271,695 251,397 255,608 225,021 202,422
Adjustment to Net Income
Net income (as reported) 73,795 59,972 76,033 40,269 34,343
Add: Deferred income tax expense (benefit) (7,729) (8,198) 1,883 1,337 145
Net income (adjusted) 66,066 51,774 77,916 41,606 34,488

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 Deferred Taxes (Summary)

Alphabet Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net Profit Margin
Reported net profit margin 24.01% 21.20% 29.51% 22.06% 21.22%
Adjusted net profit margin 21.49% 18.31% 30.24% 22.79% 21.31%
Total Asset Turnover
Reported total asset turnover 0.76 0.77 0.72 0.57 0.59
Adjusted total asset turnover 0.79 0.79 0.72 0.57 0.59
Financial Leverage
Reported financial leverage 1.42 1.43 1.43 1.44 1.37
Adjusted financial leverage 1.44 1.43 1.40 1.42 1.36
Return on Equity (ROE)
Reported ROE 26.04% 23.41% 30.22% 18.09% 17.05%
Adjusted ROE 24.32% 20.59% 30.48% 18.49% 17.04%
Return on Assets (ROA)
Reported ROA 18.34% 16.42% 21.16% 12.60% 12.45%
Adjusted ROA 16.93% 14.38% 21.77% 13.06% 12.53%

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 net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Alphabet Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.
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 and 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 and from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as adjusted 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 adjusted 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 Net Profit Margin

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
Revenues 307,394 282,836 257,637 182,527 161,857
Profitability Ratio
Net profit margin1 24.01% 21.20% 29.51% 22.06% 21.22%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 66,066 51,774 77,916 41,606 34,488
Revenues 307,394 282,836 257,637 182,527 161,857
Profitability Ratio
Adjusted net profit margin2 21.49% 18.31% 30.24% 22.79% 21.31%

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 Net profit margin = 100 × Net income ÷ Revenues
= 100 × 73,795 ÷ 307,394 = 24.01%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenues
= 100 × 66,066 ÷ 307,394 = 21.49%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Alphabet Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

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 Deferred Taxes
Selected Financial Data (US$ in millions)
Revenues 307,394 282,836 257,637 182,527 161,857
Adjusted total assets 390,223 360,003 357,984 318,532 275,188
Activity Ratio
Adjusted total asset turnover2 0.79 0.79 0.72 0.57 0.59

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 ÷ 390,223 = 0.79

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 and 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 Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 390,223 360,003 357,984 318,532 275,188
Adjusted stockholders’ equity 271,695 251,397 255,608 225,021 202,422
Solvency Ratio
Adjusted financial leverage2 1.44 1.43 1.40 1.42 1.36

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
= 390,223 ÷ 271,695 = 1.44

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 and 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 Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 66,066 51,774 77,916 41,606 34,488
Adjusted stockholders’ equity 271,695 251,397 255,608 225,021 202,422
Profitability Ratio
Adjusted ROE2 24.32% 20.59% 30.48% 18.49% 17.04%

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 × Adjusted net income ÷ Adjusted stockholders’ equity
= 100 × 66,066 ÷ 271,695 = 24.32%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted 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 Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 66,066 51,774 77,916 41,606 34,488
Adjusted total assets 390,223 360,003 357,984 318,532 275,188
Profitability Ratio
Adjusted ROA2 16.93% 14.38% 21.77% 13.06% 12.53%

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 × Adjusted net income ÷ Adjusted total assets
= 100 × 66,066 ÷ 390,223 = 16.93%

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