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Biogen Inc. (BIIB)
Analysis of Investments
Advanced level
Accounting Policy on Investments
Marketable Debt Securities
Available-for-sale marketable debt securities are recorded at fair market value and unrealized gains and losses are included in accumulated other comprehensive income (loss) in equity, net of related tax effects, unless the security has experienced a credit loss, Biogen has determined that Biogen has the intent to sell the security or Biogen has determined that it is more likely than not that Biogen will have to sell the security before its expected recovery. Realized gains and losses are reported in other income (expense), net, on a specific identification basis.
Marketable Equity Securities and Venture Capital Funds
Biogen’s marketable equity securities are recorded at fair market value and, beginning January 1, 2018, unrealized gains and losses are included in other income (expense), net in the consolidated statements of income. Prior to January 1, 2018, unrealized gains and losses were included in accumulated other comprehensive income (loss) in equity, net of related tax effects. Biogen’s marketable equity securities represent investments in publicly traded equity securities and are included in investments and other assets in the consolidated balance sheets.
Biogen’s investments in venture capital funds are recorded at net asset value, which approximates fair value, and, beginning January 1, 2018, unrealized gains and losses are included in other income (expense), net in the consolidated statements of income. Prior to January 1, 2018, these investments were accounted for under the cost method of accounting. The underlying investments of the venture capital funds in which Biogen invests are in equity securities of certain biotechnology companies and are included in investments and other assets in the consolidated balance sheets.
Source: 10-K (filing date: 2019-02-06).
Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Biogen Inc., adjustment to net income attributable to Biogen Inc.
US$ in thousands
Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Biogen Inc., adjusted profitability ratios
Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by revenue. | Biogen Inc.’s adjusted net profit margin ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by shareholders’ equity. | Biogen Inc.’s adjusted ROE deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by total assets. | Biogen Inc.’s adjusted ROA deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
Biogen Inc., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).
2018 Calculations
1 Net profit margin = 100 × Net income attributable to Biogen Inc. ÷ Revenues
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income attributable to Biogen Inc. ÷ Revenues
= 100 × ÷ =
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by revenue. | Biogen Inc.’s adjusted net profit margin ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
Adjusted Return on Equity (ROE)
Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).
2018 Calculations
1 ROE = 100 × Net income attributable to Biogen Inc. ÷ Total Biogen Inc. shareholders’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income attributable to Biogen Inc. ÷ Total Biogen Inc. shareholders’ equity
= 100 × ÷ =
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by shareholders’ equity. | Biogen Inc.’s adjusted ROE deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
Adjusted Return on Assets (ROA)
Based on: 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04).
2018 Calculations
1 ROA = 100 × Net income attributable to Biogen Inc. ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income attributable to Biogen Inc. ÷ Total assets
= 100 × ÷ =
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by total assets. | Biogen Inc.’s adjusted ROA deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |