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Analysis of Goodwill and Intangible Assets
Difficulty: Advanced
Goodwill and Intangible Assets Disclosure
Charter Communications Inc., Statement of Financial Position, Goodwill and Intangible Assets
USD $ in millions
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
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| Finite-lived intangible assets, gross carrying amount | |
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| Finite-lived intangible assets, net carrying amount | |
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Source: Based on data from Charter Communications Inc. Annual Reports
| Item | Description | The company |
|---|---|---|
| Goodwill | Carrying amount as of the balance sheet date, which is the cumulative amount paid and (if applicable) the fair value of any noncontrolling interest in the acquiree, adjusted for any amortization recognized prior to the adoption of any changes in generally accepted accounting principles (as applicable) and for any impairment charges, in excess of the fair value of net assets acquired in one or more business combination transactions. | Charter Communications Inc.'s goodwill increased from 2015 to 2016 and from 2016 to 2017. |
| Franchises, 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. | Charter Communications Inc.'s franchises, goodwill and other intangible assets increased from 2015 to 2016 but then slightly declined from 2016 to 2017. |
Analyst Adjustments: Removal of Goodwill
Charter Communications Inc., adjustments to financial data
USD $ in millions
Adjusted Ratios: Removal of Goodwill (Summary)
Charter Communications Inc., adjusted ratios
| Ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Charter Communications Inc.'s adjusted total asset turnover deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
| Adjusted financial leverage | A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income. |
Charter Communications Inc.'s adjusted financial leverage increased from 2015 to 2016 and from 2016 to 2017. |
| Adjusted ROE | A profitability ratio calculated as net income divided by adjusted shareholders' equity. | Charter Communications Inc.'s adjusted ROE improved from 2015 to 2016 and from 2016 to 2017. |
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Charter Communications Inc.'s adjusted ROA improved from 2015 to 2016 and from 2016 to 2017. |
Adjusted Total Asset Turnover
2017 Calculations
1 Total asset turnover = Revenues ÷ Total assets
= ÷ =
2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Charter Communications Inc.'s adjusted total asset turnover deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level. |
Adjusted Financial Leverage
2017 Calculations
1 Financial leverage = Total assets ÷ Total Charter shareholders' equity (deficit)
= ÷ =
2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Charter shareholders' equity (deficit)
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted financial leverage | A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income. |
Charter Communications Inc.'s adjusted financial leverage increased from 2015 to 2016 and from 2016 to 2017. |
Adjusted Return on Equity (ROE)
2017 Calculations
1 ROE = 100 × Net income (loss) attributable to Charter shareholders ÷ Total Charter shareholders' equity (deficit)
= 100 × ÷ = %
2 Adjusted ROE = 100 × Net income (loss) attributable to Charter shareholders ÷ Adjusted total Charter shareholders' equity (deficit)
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Adjusted ROE | A profitability ratio calculated as net income divided by adjusted shareholders' equity. | Charter Communications Inc.'s adjusted ROE improved from 2015 to 2016 and from 2016 to 2017. |
Adjusted Return on Assets (ROA)
2017 Calculations
1 ROA = 100 × Net income (loss) attributable to Charter shareholders ÷ Total assets
= 100 × ÷ = %
2 Adjusted ROA = 100 × Net income (loss) attributable to Charter shareholders ÷ Adjusted total assets
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Charter Communications Inc.'s adjusted ROA improved from 2015 to 2016 and from 2016 to 2017. |
