Stock Analysis on Net
Stock Analysis on Net
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Amgen Inc. (NASDAQ:AMGN)

Analysis of Investments

Advanced level

Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

Amgen Inc., adjustment to net income

US$ in millions

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12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net income (as reported) 7,264  7,842  8,394  1,979  7,722 
Add: Gains (losses) on available-for-sale securities (21) 360  (185) (6) 122 
Net income (adjusted) 7,243  8,202  8,209  1,973  7,844 

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).


Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)

Amgen Inc., adjusted profitability ratios

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net Profit Margin
Reported net profit margin 29.97% 35.32% 37.25% 9.08% 35.27%
Adjusted net profit margin 29.88% 36.94% 36.43% 9.05% 35.83%
Return on Equity (ROE)
Reported ROE 77.20% 81.07% 67.15% 7.84% 25.85%
Adjusted ROE 76.98% 84.79% 65.67% 7.82% 26.26%
Return on Assets (ROA)
Reported ROA 11.54% 13.13% 12.64% 2.48% 9.95%
Adjusted ROA 11.51% 13.74% 12.36% 2.47% 10.10%

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).

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Amgen Inc.’s adjusted net profit margin ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Amgen Inc.’s adjusted ROE improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Amgen Inc.’s adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Amgen Inc., Profitability Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

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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)
Net income 7,264  7,842  8,394  1,979  7,722 
Product sales 24,240  22,204  22,533  21,795  21,892 
Profitability Ratio
Net profit margin1 29.97% 35.32% 37.25% 9.08% 35.27%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income 7,243  8,202  8,209  1,973  7,844 
Product sales 24,240  22,204  22,533  21,795  21,892 
Profitability Ratio
Adjusted net profit margin2 29.88% 36.94% 36.43% 9.05% 35.83%

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 Net profit margin = 100 × Net income ÷ Product sales
= 100 × 7,264 ÷ 24,240 = 29.97%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Product sales
= 100 × 7,243 ÷ 24,240 = 29.88%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Amgen Inc.’s adjusted net profit margin ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Adjusted Return on Equity (ROE)

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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)
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: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income 7,243  8,202  8,209  1,973  7,844 
Stockholders’ equity 9,409  9,673  12,500  25,241  29,875 
Profitability Ratio
Adjusted ROE2 76.98% 84.79% 65.67% 7.82% 26.26%

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 × Adjusted net income ÷ Stockholders’ equity
= 100 × 7,243 ÷ 9,409 = 76.98%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Amgen Inc.’s adjusted ROE improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

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: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income 7,243  8,202  8,209  1,973  7,844 
Total assets 62,948  59,707  66,416  79,954  77,626 
Profitability Ratio
Adjusted ROA2 11.51% 13.74% 12.36% 2.47% 10.10%

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 × Adjusted net income ÷ Total assets
= 100 × 7,243 ÷ 62,948 = 11.51%

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