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Microsoft Excel LibreOffice Calc

Intuit Inc. (INTU)

Analysis of Investments

Advanced level

Accounting Policy on Investments

Intuit considers highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. In all periods presented, cash equivalents consist primarily of time deposits, savings deposit accounts, and money market funds, and investments consist primarily of investment-grade available-for-sale debt securities. Except for direct obligations of the United States government, securities issued by agencies of the United States government, and money market funds, Intuit diversifies the investments by limiting the holdings with any individual issuer.

Intuit uses the specific identification method to compute gains and losses on investments. Intuit records unrealized gains and losses on investments, net of tax, in accumulated other comprehensive income in the stockholders’ equity section of the consolidated balance sheets and reflects unrealized gain and loss activity in other comprehensive income on the consolidated statement of comprehensive income. Intuit generally classifies available-for-sale debt securities as current assets based upon the ability and intent to use any and all of these securities as necessary to satisfy the significant short-term liquidity requirements that may arise from the highly seasonal nature of the businesses. Because of the significant business seasonality, stock repurchase programs, and acquisition opportunities, cash flow requirements may fluctuate dramatically from quarter to quarter and require Intuit to use a significant amount of the investments Intuit holds as available-for-sale.

Source: 10-K (filing date: 2019-08-30).

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

Intuit Inc., adjustment to net income

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended Jul 31, 2019 Jul 31, 2018 Jul 31, 2017 Jul 31, 2016 Jul 31, 2015 Jul 31, 2014
Net income (as reported)
Add: Unrealized gain (loss) on available-for-sale debt securities
Net income (adjusted)

Based on: 10-K (filing date: 2019-08-30), 10-K (filing date: 2018-08-31), 10-K (filing date: 2017-09-01), 10-K (filing date: 2016-09-01), 10-K (filing date: 2015-09-01), 10-K (filing date: 2014-09-12).

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

Intuit Inc., adjusted profitability ratios

Microsoft Excel LibreOffice Calc
Jul 31, 2019 Jul 31, 2018 Jul 31, 2017 Jul 31, 2016 Jul 31, 2015 Jul 31, 2014
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (filing date: 2019-08-30), 10-K (filing date: 2018-08-31), 10-K (filing date: 2017-09-01), 10-K (filing date: 2016-09-01), 10-K (filing date: 2015-09-01), 10-K (filing date: 2014-09-12).

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Intuit Inc.’s adjusted net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Intuit Inc.’s adjusted ROE deteriorated from 2017 to 2018 and from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Intuit Inc.’s adjusted ROA deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Intuit Inc., Profitability Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Jul 31, 2019 Jul 31, 2018 Jul 31, 2017 Jul 31, 2016 Jul 31, 2015 Jul 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income
Net revenue
Profitability Ratio
Net profit margin1
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income
Net revenue
Profitability Ratio
Adjusted net profit margin2

Based on: 10-K (filing date: 2019-08-30), 10-K (filing date: 2018-08-31), 10-K (filing date: 2017-09-01), 10-K (filing date: 2016-09-01), 10-K (filing date: 2015-09-01), 10-K (filing date: 2014-09-12).

2019 Calculations

1 Net profit margin = 100 × Net income ÷ Net revenue
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Net revenue
= 100 × ÷ =

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Intuit Inc.’s adjusted net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Jul 31, 2019 Jul 31, 2018 Jul 31, 2017 Jul 31, 2016 Jul 31, 2015 Jul 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income
Stockholders’ equity
Profitability Ratio
ROE1
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income
Stockholders’ equity
Profitability Ratio
Adjusted ROE2

Based on: 10-K (filing date: 2019-08-30), 10-K (filing date: 2018-08-31), 10-K (filing date: 2017-09-01), 10-K (filing date: 2016-09-01), 10-K (filing date: 2015-09-01), 10-K (filing date: 2014-09-12).

2019 Calculations

1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net income ÷ Stockholders’ equity
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Intuit Inc.’s adjusted ROE deteriorated from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Jul 31, 2019 Jul 31, 2018 Jul 31, 2017 Jul 31, 2016 Jul 31, 2015 Jul 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income
Total assets
Profitability Ratio
ROA1
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income
Total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (filing date: 2019-08-30), 10-K (filing date: 2018-08-31), 10-K (filing date: 2017-09-01), 10-K (filing date: 2016-09-01), 10-K (filing date: 2015-09-01), 10-K (filing date: 2014-09-12).

2019 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Intuit Inc.’s adjusted ROA deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.