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Analysis of Investments

Difficulty: Advanced


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

Broadcom Inc., adjustment to Net Income (loss) Attributable To Ordinary Shares

USD $ in millions

Microsoft Excel LibreOffice Calc
12 months ended Oct 29, 2017 Oct 30, 2016 Nov 1, 2015 Nov 2, 2014 Nov 3, 2013 Oct 28, 2012
Net income (loss) attributable to ordinary shares (as reported) 1,692  (1,739) 1,364  263  552  563 
Add: Change in net unrealized gain (loss) on available-for-sale securities (3)
Net income (loss) attributable to ordinary shares (adjusted) 1,692  (1,739) 1,364  263  549  563 

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

Broadcom Inc., adjusted ratios

Microsoft Excel LibreOffice Calc
Oct 29, 2017 Oct 30, 2016 Nov 1, 2015 Nov 2, 2014 Nov 3, 2013 Oct 28, 2012
Net Profit Margin
Reported net profit margin 9.59% -13.13% 19.99% 6.16% 21.90% 23.82%
Adjusted net profit margin 9.59% -13.13% 19.99% 6.16% 21.79% 23.82%
Return on Equity (ROE)
Reported ROE 8.34% -9.20% 28.94% 8.11% 19.13% 23.27%
Adjusted ROE 8.34% -9.20% 28.94% 8.11% 19.02% 23.27%
Return on Assets (ROA)
Reported ROA 3.11% -3.48% 12.88% 2.51% 16.16% 19.67%
Adjusted ROA 3.11% -3.48% 12.88% 2.51% 16.08% 19.67%
Ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Broadcom Inc.'s adjusted net profit margin deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders' equity. Broadcom Inc.'s adjusted ROE deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Broadcom Inc.'s adjusted ROA deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017.

Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Oct 29, 2017 Oct 30, 2016 Nov 1, 2015 Nov 2, 2014 Nov 3, 2013 Oct 28, 2012
As Reported
Net income (loss) attributable to ordinary shares (USD $ in millions) 1,692  (1,739) 1,364  263  552  563 
Net revenue (USD $ in millions) 17,636  13,240  6,824  4,269  2,520  2,364 
Net profit margin1 9.59% -13.13% 19.99% 6.16% 21.90% 23.82%
Adjusted: Mark to Market Available-for-sale Securities
Adjusted net income (loss) attributable to ordinary shares (USD $ in millions) 1,692  (1,739) 1,364  263  549  563 
Net revenue (USD $ in millions) 17,636  13,240  6,824  4,269  2,520  2,364 
Adjusted net profit margin2 9.59% -13.13% 19.99% 6.16% 21.79% 23.82%

2017 Calculations

1 Net profit margin = 100 × Net income (loss) attributable to ordinary shares ÷ Net revenue
= 100 × 1,692 ÷ 17,636 = 9.59%

2 Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to ordinary shares ÷ Net revenue
= 100 × 1,692 ÷ 17,636 = 9.59%

Ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Broadcom Inc.'s adjusted net profit margin deteriorated from 2015 to 2016 but then improved from 2016 to 2017 not reaching 2015 level.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Oct 29, 2017 Oct 30, 2016 Nov 1, 2015 Nov 2, 2014 Nov 3, 2013 Oct 28, 2012
As Reported
Net income (loss) attributable to ordinary shares (USD $ in millions) 1,692  (1,739) 1,364  263  552  563 
Total Broadcom Inc. stockholders’ equity (USD $ in millions) 20,285  18,892  4,714  3,243  2,886  2,419 
ROE1 8.34% -9.20% 28.94% 8.11% 19.13% 23.27%
Adjusted: Mark to Market Available-for-sale Securities
Adjusted net income (loss) attributable to ordinary shares (USD $ in millions) 1,692  (1,739) 1,364  263  549  563 
Total Broadcom Inc. stockholders’ equity (USD $ in millions) 20,285  18,892  4,714  3,243  2,886  2,419 
Adjusted ROE2 8.34% -9.20% 28.94% 8.11% 19.02% 23.27%

2017 Calculations

1 ROE = 100 × Net income (loss) attributable to ordinary shares ÷ Total Broadcom Inc. stockholders’ equity
= 100 × 1,692 ÷ 20,285 = 8.34%

2 Adjusted ROE = 100 × Adjusted net income (loss) attributable to ordinary shares ÷ Total Broadcom Inc. stockholders’ equity
= 100 × 1,692 ÷ 20,285 = 8.34%

Ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders' equity. Broadcom Inc.'s adjusted ROE deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Oct 29, 2017 Oct 30, 2016 Nov 1, 2015 Nov 2, 2014 Nov 3, 2013 Oct 28, 2012
As Reported
Net income (loss) attributable to ordinary shares (USD $ in millions) 1,692  (1,739) 1,364  263  552  563 
Total assets (USD $ in millions) 54,418  49,966  10,592  10,491  3,415  2,862 
ROA1 3.11% -3.48% 12.88% 2.51% 16.16% 19.67%
Adjusted: Mark to Market Available-for-sale Securities
Adjusted net income (loss) attributable to ordinary shares (USD $ in millions) 1,692  (1,739) 1,364  263  549  563 
Total assets (USD $ in millions) 54,418  49,966  10,592  10,491  3,415  2,862 
Adjusted ROA2 3.11% -3.48% 12.88% 2.51% 16.08% 19.67%

2017 Calculations

1 ROA = 100 × Net income (loss) attributable to ordinary shares ÷ Total assets
= 100 × 1,692 ÷ 54,418 = 3.11%

2 Adjusted ROA = 100 × Adjusted net income (loss) attributable to ordinary shares ÷ Total assets
= 100 × 1,692 ÷ 54,418 = 3.11%

Ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Broadcom Inc.'s adjusted ROA deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017.