Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Amgen Inc. (NASDAQ:AMGN)

Analysis of Goodwill and Intangible Assets

Advanced level

Goodwill and Intangible Asset Disclosure

Amgen Inc., balance sheet: goodwill and intangible assets

US$ in millions

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Goodwill 14,689  14,703  14,699  14,761  14,751 
Developed-product-technology rights 25,591  25,575  12,573  12,589  12,534 
Licensing rights 3,743  3,761  3,772  3,275  3,275 
Marketing-related rights 1,367  1,382  1,297  1,319  1,333 
R&D technology rights 1,317  1,273  1,148  1,161  1,122 
Finite-lived intangible assets, gross carrying amount 32,018  31,991  18,790  18,344  18,264 
Accumulated amortization (15,461) (12,632) (11,402) (10,121) (8,744)
Finite-lived intangible assets, net 16,557  19,359  7,388  8,223  9,520 
IPR&D 30  54  55  386  759 
Indefinite-lived intangible assets 30  54  55  386  759 
Other intangible assets, net 16,587  19,413  7,443  8,609  10,279 
Goodwill and other intangible assets 31,276  34,116  22,142  23,370  25,030 

Based on: 10-K (filing date: 2021-02-09), 10-K (filing date: 2020-02-12), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14).

Item Description The company
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Amgen Inc.’s goodwill increased from 2018 to 2019 but then decreased significantly from 2019 to 2020.
Other intangible assets, net Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Amgen Inc.’s other intangible assets, net increased from 2018 to 2019 but then slightly decreased from 2019 to 2020.
Goodwill and other intangible assets Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Amgen Inc.’s goodwill and other intangible assets increased from 2018 to 2019 but then slightly decreased from 2019 to 2020.

Adjustments to Financial Statements: Removal of Goodwill

Amgen Inc., adjustments to financial statements

US$ in millions

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Adjustment to Total Assets
Total assets (as reported) 62,948  59,707  66,416  79,954  77,626 
Less: Goodwill 14,689  14,703  14,699  14,761  14,751 
Total assets (adjusted) 48,259  45,004  51,717  65,193  62,875 
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 9,409  9,673  12,500  25,241  29,875 
Less: Goodwill 14,689  14,703  14,699  14,761  14,751 
Stockholders’ equity (adjusted) (5,280) (5,030) (2,199) 10,480  15,124 

Based on: 10-K (filing date: 2021-02-09), 10-K (filing date: 2020-02-12), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14).

Amgen Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Amgen Inc., adjusted financial ratios

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Total Asset Turnover
Reported total asset turnover 0.39 0.37 0.34 0.27 0.28
Adjusted total asset turnover 0.50 0.49 0.44 0.33 0.35
Financial Leverage
Reported financial leverage 6.69 6.17 5.31 3.17 2.60
Adjusted financial leverage — — — 6.22 4.16
Return on Equity (ROE)
Reported ROE 77.20% 81.07% 67.15% 7.84% 25.85%
Adjusted ROE — — — 18.88% 51.06%
Return on Assets (ROA)
Reported ROA 11.54% 13.13% 12.64% 2.48% 9.95%
Adjusted ROA 15.05% 17.43% 16.23% 3.04% 12.28%

Based on: 10-K (filing date: 2021-02-09), 10-K (filing date: 2020-02-12), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Amgen Inc.’s adjusted total asset turnover ratio improved from 2018 to 2019 and from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Amgen Inc.’s adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Amgen Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Product sales 24,240  22,204  22,533  21,795  21,892 
Total assets 62,948  59,707  66,416  79,954  77,626 
Activity Ratio
Total asset turnover1 0.39 0.37 0.34 0.27 0.28
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Product sales 24,240  22,204  22,533  21,795  21,892 
Adjusted total assets 48,259  45,004  51,717  65,193  62,875 
Activity Ratio
Adjusted total asset turnover2 0.50 0.49 0.44 0.33 0.35

Based on: 10-K (filing date: 2021-02-09), 10-K (filing date: 2020-02-12), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14).

2020 Calculations

1 Total asset turnover = Product sales ÷ Total assets
= 24,240 ÷ 62,948 = 0.39

2 Adjusted total asset turnover = Product sales ÷ Adjusted total assets
= 24,240 ÷ 48,259 = 0.50

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Amgen Inc.’s adjusted total asset turnover ratio improved from 2018 to 2019 and from 2019 to 2020.

Adjusted Financial Leverage

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Total assets 62,948  59,707  66,416  79,954  77,626 
Stockholders’ equity 9,409  9,673  12,500  25,241  29,875 
Solvency Ratio
Financial leverage1 6.69 6.17 5.31 3.17 2.60
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 48,259  45,004  51,717  65,193  62,875 
Adjusted stockholders’ equity (5,280) (5,030) (2,199) 10,480  15,124 
Solvency Ratio
Adjusted financial leverage2 — — — 6.22 4.16

Based on: 10-K (filing date: 2021-02-09), 10-K (filing date: 2020-02-12), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14).

2020 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= 62,948 ÷ 9,409 = 6.69

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 48,259 ÷ -5,280 = —

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income 7,264  7,842  8,394  1,979  7,722 
Stockholders’ equity 9,409  9,673  12,500  25,241  29,875 
Profitability Ratio
ROE1 77.20% 81.07% 67.15% 7.84% 25.85%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income 7,264  7,842  8,394  1,979  7,722 
Adjusted stockholders’ equity (5,280) (5,030) (2,199) 10,480  15,124 
Profitability Ratio
Adjusted ROE2 — — — 18.88% 51.06%

Based on: 10-K (filing date: 2021-02-09), 10-K (filing date: 2020-02-12), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14).

2020 Calculations

1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 7,264 ÷ 9,409 = 77.20%

2 Adjusted ROE = 100 × Net income ÷ Adjusted stockholders’ equity
= 100 × 7,264 ÷ -5,280 = —

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income 7,264  7,842  8,394  1,979  7,722 
Total assets 62,948  59,707  66,416  79,954  77,626 
Profitability Ratio
ROA1 11.54% 13.13% 12.64% 2.48% 9.95%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income 7,264  7,842  8,394  1,979  7,722 
Adjusted total assets 48,259  45,004  51,717  65,193  62,875 
Profitability Ratio
Adjusted ROA2 15.05% 17.43% 16.23% 3.04% 12.28%

Based on: 10-K (filing date: 2021-02-09), 10-K (filing date: 2020-02-12), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14).

2020 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 7,264 ÷ 62,948 = 11.54%

2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 7,264 ÷ 48,259 = 15.05%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Amgen Inc.’s adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.