Stock Analysis on Net
Stock Analysis on Net

Broadcom Inc. (NASDAQ:AVGO)

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

Broadcom Inc., balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel
Oct 29, 2023 Oct 30, 2022 Oct 31, 2021 Nov 1, 2020 Nov 3, 2019 Nov 4, 2018
Goodwill 43,653 43,614 43,450 43,447 36,714 26,913
Purchased technology 12,938 19,450 23,932 24,119 20,935 15,806
Customer contracts and related relationships 7,059 7,066 8,356 8,389 5,978 1,792
Order backlog 9 484 2,579 2,579 2,569 —
Trade names 649 700 787 797 712 578
Other 168 174 239 252 241 239
Intangible assets subject to amortization, gross carrying amount 20,823 27,874 35,893 36,136 30,435 18,415
Accumulated amortization (16,966) (20,792) (24,546) (19,379) (13,144) (7,917)
Intangible assets subject to amortization, net book value 3,857 7,082 11,347 16,757 17,291 10,498
IPR&D 10 29 27 25 263 264
Intangible assets 3,867 7,111 11,374 16,782 17,554 10,762
Goodwill and intangible assets 47,520 50,725 54,824 60,229 54,268 37,675

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03), 10-K (reporting date: 2018-11-04).

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. Broadcom Inc. goodwill increased from 2021 to 2022 and from 2022 to 2023.
Intangible assets Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Broadcom Inc. intangible assets decreased from 2021 to 2022 and from 2022 to 2023.
Goodwill and 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. Broadcom Inc. goodwill and intangible assets decreased from 2021 to 2022 and from 2022 to 2023.

Adjustments to Financial Statements: Removal of Goodwill

Broadcom Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Oct 29, 2023 Oct 30, 2022 Oct 31, 2021 Nov 1, 2020 Nov 3, 2019 Nov 4, 2018
Adjustment to Total Assets
Total assets (as reported) 72,861 73,249 75,570 75,933 67,493 50,124
Less: Goodwill 43,653 43,614 43,450 43,447 36,714 26,913
Total assets (adjusted) 29,208 29,635 32,120 32,486 30,779 23,211
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 23,988 22,709 24,962 23,874 24,941 26,657
Less: Goodwill 43,653 43,614 43,450 43,447 36,714 26,913
Stockholders’ equity (adjusted) (19,665) (20,905) (18,488) (19,573) (11,773) (256)

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03), 10-K (reporting date: 2018-11-04).

Broadcom Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Broadcom Inc., adjusted financial ratios

Microsoft Excel
Oct 29, 2023 Oct 30, 2022 Oct 31, 2021 Nov 1, 2020 Nov 3, 2019 Nov 4, 2018
Total Asset Turnover
Reported total asset turnover 0.49 0.45 0.36 0.31 0.33 0.42
Adjusted total asset turnover 1.23 1.12 0.85 0.74 0.73 0.90
Financial Leverage
Reported financial leverage 3.04 3.23 3.03 3.18 2.71 1.88
Adjusted financial leverage — — — — — —
Return on Equity (ROE)
Reported ROE 58.70% 50.62% 26.99% 12.40% 10.92% 45.99%
Adjusted ROE — — — — — —
Return on Assets (ROA)
Reported ROA 19.33% 15.69% 8.91% 3.90% 4.04% 24.46%
Adjusted ROA 48.21% 38.79% 20.97% 9.11% 8.85% 52.82%

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03), 10-K (reporting date: 2018-11-04).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Broadcom Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Broadcom Inc. adjusted ROA improved from 2021 to 2022 and from 2022 to 2023.

Broadcom Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel
Oct 29, 2023 Oct 30, 2022 Oct 31, 2021 Nov 1, 2020 Nov 3, 2019 Nov 4, 2018
As Reported
Selected Financial Data (US$ in millions)
Net revenue 35,819 33,203 27,450 23,888 22,597 20,848
Total assets 72,861 73,249 75,570 75,933 67,493 50,124
Activity Ratio
Total asset turnover1 0.49 0.45 0.36 0.31 0.33 0.42
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net revenue 35,819 33,203 27,450 23,888 22,597 20,848
Adjusted total assets 29,208 29,635 32,120 32,486 30,779 23,211
Activity Ratio
Adjusted total asset turnover2 1.23 1.12 0.85 0.74 0.73 0.90

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03), 10-K (reporting date: 2018-11-04).

2023 Calculations

1 Total asset turnover = Net revenue ÷ Total assets
= 35,819 ÷ 72,861 = 0.49

2 Adjusted total asset turnover = Net revenue ÷ Adjusted total assets
= 35,819 ÷ 29,208 = 1.23

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Broadcom Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Oct 29, 2023 Oct 30, 2022 Oct 31, 2021 Nov 1, 2020 Nov 3, 2019 Nov 4, 2018
As Reported
Selected Financial Data (US$ in millions)
Total assets 72,861 73,249 75,570 75,933 67,493 50,124
Stockholders’ equity 23,988 22,709 24,962 23,874 24,941 26,657
Solvency Ratio
Financial leverage1 3.04 3.23 3.03 3.18 2.71 1.88
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 29,208 29,635 32,120 32,486 30,779 23,211
Adjusted stockholders’ equity (19,665) (20,905) (18,488) (19,573) (11,773) (256)
Solvency Ratio
Adjusted financial leverage2 — — — — — —

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03), 10-K (reporting date: 2018-11-04).

2023 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= 72,861 ÷ 23,988 = 3.04

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 29,208 ÷ -19,665 = —

Adjusted Return on Equity (ROE)

Microsoft Excel
Oct 29, 2023 Oct 30, 2022 Oct 31, 2021 Nov 1, 2020 Nov 3, 2019 Nov 4, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Broadcom Inc. stockholders 14,082 11,495 6,736 2,960 2,724 12,259
Stockholders’ equity 23,988 22,709 24,962 23,874 24,941 26,657
Profitability Ratio
ROE1 58.70% 50.62% 26.99% 12.40% 10.92% 45.99%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to Broadcom Inc. stockholders 14,082 11,495 6,736 2,960 2,724 12,259
Adjusted stockholders’ equity (19,665) (20,905) (18,488) (19,573) (11,773) (256)
Profitability Ratio
Adjusted ROE2 — — — — — —

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03), 10-K (reporting date: 2018-11-04).

2023 Calculations

1 ROE = 100 × Net income attributable to Broadcom Inc. stockholders ÷ Stockholders’ equity
= 100 × 14,082 ÷ 23,988 = 58.70%

2 Adjusted ROE = 100 × Net income attributable to Broadcom Inc. stockholders ÷ Adjusted stockholders’ equity
= 100 × 14,082 ÷ -19,665 = —

Adjusted Return on Assets (ROA)

Microsoft Excel
Oct 29, 2023 Oct 30, 2022 Oct 31, 2021 Nov 1, 2020 Nov 3, 2019 Nov 4, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Broadcom Inc. stockholders 14,082 11,495 6,736 2,960 2,724 12,259
Total assets 72,861 73,249 75,570 75,933 67,493 50,124
Profitability Ratio
ROA1 19.33% 15.69% 8.91% 3.90% 4.04% 24.46%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to Broadcom Inc. stockholders 14,082 11,495 6,736 2,960 2,724 12,259
Adjusted total assets 29,208 29,635 32,120 32,486 30,779 23,211
Profitability Ratio
Adjusted ROA2 48.21% 38.79% 20.97% 9.11% 8.85% 52.82%

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03), 10-K (reporting date: 2018-11-04).

2023 Calculations

1 ROA = 100 × Net income attributable to Broadcom Inc. stockholders ÷ Total assets
= 100 × 14,082 ÷ 72,861 = 19.33%

2 Adjusted ROA = 100 × Net income attributable to Broadcom Inc. stockholders ÷ Adjusted total assets
= 100 × 14,082 ÷ 29,208 = 48.21%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Broadcom Inc. adjusted ROA improved from 2021 to 2022 and from 2022 to 2023.