Analysis of Investments
Paying user area
Try for free
Alphabet Inc. pages available for free this week:
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Alphabet Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Alphabet Inc., adjustment to net income
US$ in millions
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|---|
| Net income (as reported) | ||||||
| Add: Net change in available-for-sale investments, net of income tax | ||||||
| Net income (adjusted) |
Based on: 10-K (reporting date: 2024-12-31), 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).
Over the five-year period under review, the reported net income of the company demonstrated notable fluctuations with a general upward trend. Starting from approximately 40.3 billion US dollars in 2020, the reported net income experienced a significant increase in 2021, nearly doubling to about 76 billion US dollars. In 2022, a decline followed, reducing the figure to nearly 60 billion US dollars. However, the income rose again in 2023 reaching approximately 73.8 billion US dollars and continued its upward trajectory in 2024 to over 100 billion US dollars, marking the highest value in the period examined.
The adjusted net income figures closely mirrored the reported net income trends, indicating similar underlying earnings patterns when accounting for investment adjustments. The adjusted net income started slightly higher than the reported net income in 2020 at approximately 41.1 billion US dollars. It then increased in 2021 to around 74.7 billion US dollars, slightly less than the reported net income for that year. A decrease was noted in 2022, with adjusted net income dropping to roughly 56.3 billion US dollars, followed by a recovery to approximately 76.3 billion US dollars in 2023. Finally, there was a peak in 2024 with adjusted net income reaching close to 100.8 billion US dollars, the highest within the dataset.
- Reported Net Income Trends
- Significant increase from 2020 to 2021, a decline in 2022, followed by steady growth through 2023 and 2024.
- Adjusted Net Income Trends
- Similar pattern to reported net income, with a peak in 2024; slight differences in absolute values reflecting investment adjustments.
- Comparative Insights
- The proximity of reported and adjusted net income values suggests that investment adjustments have a relatively consistent but moderate impact on net income figures across the years.
- Overall Observation
- The results indicate robust growth potential with some volatility, and the adjustment process does not drastically alter the reported profitability trends.
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Alphabet Inc., adjusted profitability ratios
Based on: 10-K (reporting date: 2024-12-31), 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).
The financial analysis over the years indicates variable but overall positive trends across key profitability and efficiency metrics. Both reported and investment adjusted data show fluctuations yet demonstrate growth towards the most recent periods.
- Net Profit Margin
- The reported net profit margin experienced a notable peak in 2021 at 29.51%, followed by a decline to 21.2% in 2022, then a recovery through 2023 and 2024 reaching 28.6%. The adjusted net profit margin follows a similar pattern with a peak of 28.98% in 2021, a sharper dip to 19.89% in 2022, and then an upward trajectory to 28.79% in 2024. This indicates some volatility, with 2022 being a comparatively weak year, but a strong rebound thereafter.
- Return on Equity (ROE)
- Reported ROE shows a significant increase from 18.09% in 2020 to 30.22% in 2021, declining to 23.41% in 2022, before steadily rising again to 30.8% in 2024. Adjusted ROE follows a similar movement, peaking at 29.67% in 2021, dropping to 21.96% in 2022, and then climbing to a high of 31.0% by 2024. The data suggests strong shareholder returns with some mid-period weakness but a robust recovery.
- Return on Assets (ROA)
- The reported ROA increases sharply from 12.6% in 2020 to 21.16% in 2021, decreases to 16.42% in 2022, then rises again to 22.24% in 2024. Adjusted ROA similarly peaks in 2021 at 20.78%, dips to 15.4% in 2022, and crescendos to 22.38% in 2024. This pattern mirrors that of ROE and net margins, illustrating efficiency in asset utilization with a mid-term setback and subsequent growth.
Overall, the company shows strong profitability and return metrics with a noticeable dip around 2022 across all indicators and adjustments. However, the following years display an effective recovery and return to levels comparable to or exceeding previous highs. The alignment between reported and adjusted figures suggests consistency in performance trends regardless of accounting treatments or investment adjustments.
Alphabet Inc., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2024-12-31), 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).
2024 Calculations
1 Net profit margin = 100 × Net income ÷ Revenues
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenues
= 100 × ÷ =
The financial data reveals a dynamic progression in net income and profit margins over the five-year period.
- Net Income Trends
- Reported net income shows substantial growth from 40,269 million US dollars in 2020 to 76,033 million in 2021. Following this peak, there is a notable decline to 59,972 million in 2022. The reported net income then increases again to 73,795 million in 2023 and further to 100,118 million by 2024, marking the highest value in the period.
- Adjusted net income follows a broadly similar pattern with 41,069 million in 2020 increasing to 74,657 million in 2021, then decreasing to 56,259 million in 2022. It rebounds sharply in 2023 to 76,307 million and culminates at 100,784 million in 2024. The adjusted figures slightly exceed reported net income in most years, indicating certain non-recurring or exceptional items were likely adjusted out.
- Profit Margin Patterns
- The reported net profit margin increased significantly from 22.06% in 2020 to a peak of 29.51% in 2021, followed by a decline to 21.20% in 2022. Subsequently, the margin improved over the next two years, reaching 24.01% in 2023 and 28.60% in 2024, nearly regaining the 2021 level.
- The adjusted net profit margin is generally higher than the reported margin, beginning at 22.50% in 2020, rising to 28.98% in 2021, and then declining more sharply to 19.89% in 2022. A recovery is evident with margins improving to 24.82% in 2023 and 28.79% in 2024, indicating enhanced profitability excluding certain adjustments.
- Overall Insights
- Both reported and adjusted metrics point to a volatile but ultimately upward trajectory in financial performance. The dip in 2022 is a notable deviation from the overall growth trend, suggesting challenges or extraordinary factors impacting profitability during that year.
- The close alignment between reported and adjusted net income and profit margins in later years signals stabilization in operational results and less impact from exceptional adjustments.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2024-12-31), 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).
2024 Calculations
1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income ÷ Stockholders’ equity
= 100 × ÷ =
- Net Income Trends
- The reported net income exhibits a generally upward trajectory, starting at 40,269 million US dollars in 2020 and escalating significantly to 100,118 million US dollars by 2024. Despite a dip in 2022 to 59,972 million US dollars from a peak in 2021, net income rebounds robustly in the following years. The adjusted net income mirrors this pattern closely, rising from 41,069 million US dollars in 2020 to 100,784 million US dollars in 2024, with a similar decline in 2022 before recovering.
- Return on Equity (ROE) Trends
- Both reported and adjusted ROE percentages follow a similar pattern across the observed period. The reported ROE starts at 18.09% in 2020 and peaks at 30.22% in 2021 before declining to 23.41% in 2022. It then gradually increases again, reaching 30.8% in 2024. Adjusted ROE shows a comparable trend, beginning at 18.45% in 2020, peaking at 29.67% in 2021, dipping to 21.96% in 2022, and recovering to 31% by 2024. The close alignment between reported and adjusted ROE suggests consistent financial performance adjustments.
- Insights on Performance Variations
- The interim decline in net income and ROE in 2022 hints at possible operational challenges or increased costs during that year, followed by an effective recovery strategy in subsequent periods. The significant increases in both net income and ROE in 2024 indicate strong profitability and efficient use of equity capital. The adjusted figures remain consistently close to reported values, implying that adjustments made to net income and ROE are minimal and do not substantially alter the overall financial performance picture.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2024-12-31), 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).
2024 Calculations
1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × ÷ =
- Net Income Trends
- The reported net income demonstrated significant growth over the observed period. Starting at 40,269 million USD in 2020, it more than doubled by 2021 to 76,033 million USD. This was followed by a decline to 59,972 million USD in 2022, before rebounding to 73,795 million USD in 2023 and reaching an all-time high of 100,118 million USD in 2024.
- Adjusted net income showed a roughly similar pattern with somewhat less volatility. Beginning at 41,069 million USD in 2020, it peaked at 74,657 million USD in 2021, dropped to 56,259 million USD in 2022, then increased again to 76,307 million USD in 2023, concluding with a rise to 100,784 million USD in 2024.
- Return on Assets (ROA) Trends
- The reported ROA percentage closely mirrors the trends in reported net income. It increased from 12.6% in 2020 to a peak of 21.16% in 2021, declined to 16.42% in 2022, rose to 18.34% in 2023, and reached a new high of 22.24% in 2024. This indicates improving asset profitability over the period despite some fluctuations.
- Adjusted ROA also echoes these movements with slightly different values, starting at 12.85% in 2020, peaking at 20.78% in 2021, dropping to 15.4% in 2022, increasing to 18.96% in 2023, and reaching 22.38% in 2024. This adjusted measure confirms the overall positive trend in asset efficiency and profitability after accounting for adjustments.
- Overall Insights
- The financial data reveals a pattern of strong growth interrupted by a dip in 2022, after which performance recovered robustly. Both reported and adjusted metrics exhibit similar trends, reinforcing the reliability of the adjusted figures as reflections of genuine operational performance.
- The substantial improvement in ROA by 2024 suggests enhanced asset utilization and profitability, aligning with the peak net income figures. The consistency between reported and adjusted data highlights stability in financial reporting despite the adjustments applied.