Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

NVIDIA Corp. (NASDAQ:NVDA)

Analysis of Goodwill and Intangible Assets

Advanced level

Goodwill and Intangible Asset Disclosure

NVIDIA Corp., balance sheet: goodwill and intangible assets

US$ in millions

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Jan 26, 2020 Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015
Goodwill 618  618  618  618  618  618 
Acquisition-related intangible assets 195  195  195  193  193  189 
Patents and licensed technology 520  491  469  468  462  449 
Amortizable intangible assets, gross carrying amount 715  686  664  661  655  638 
Accumulated amortization (666) (641) (612) (557) (489) (416)
Amortizable intangible assets, net carrying amount 49  45  52  104  166  222 
Goodwill and amortizable intangible assets 667  663  670  722  784  840 

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12).

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.
Goodwill and amortizable 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. NVIDIA Corp.’s goodwill and amortizable intangible assets decreased from 2018 to 2019 but then increased from 2019 to 2020 not reaching 2018 level.

Adjustments to Financial Statements: Removal of Goodwill

NVIDIA Corp., adjustments to financial statements

US$ in millions

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Jan 26, 2020 Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015
Adjustment to Total Assets
Total assets (as reported) 17,315  13,292  11,241  9,841  7,370  7,201 
Less: Goodwill 618  618  618  618  618  618 
Total assets (adjusted) 16,697  12,674  10,623  9,223  6,752  6,583 
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported) 12,204  9,342  7,471  5,762  4,469  4,418 
Less: Goodwill 618  618  618  618  618  618 
Shareholders’ equity (adjusted) 11,586  8,724  6,853  5,144  3,851  3,800 

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12).

NVIDIA Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

NVIDIA Corp., adjusted financial ratios

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Jan 26, 2020 Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015
Total Asset Turnover
Reported total asset turnover 0.63 0.88 0.86 0.70 0.68 0.65
Adjusted total asset turnover 0.65 0.92 0.91 0.75 0.74 0.71
Financial Leverage
Reported financial leverage 1.42 1.42 1.50 1.71 1.65 1.63
Adjusted financial leverage 1.44 1.45 1.55 1.79 1.75 1.73
Return on Equity (ROE)
Reported ROE 22.91% 44.33% 40.78% 28.91% 13.74% 14.27%
Adjusted ROE 24.13% 47.47% 44.46% 32.39% 15.94% 16.60%
Return on Assets (ROA)
Reported ROA 16.15% 31.15% 27.11% 16.93% 8.33% 8.76%
Adjusted ROA 16.75% 32.67% 28.68% 18.06% 9.09% 9.58%

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. NVIDIA Corp.’s adjusted total asset turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
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.		 NVIDIA Corp.’s adjusted financial leverage ratio decreased from 2018 to 2019 and from 2019 to 2020.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. NVIDIA Corp.’s adjusted ROE improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. NVIDIA Corp.’s adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

NVIDIA Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

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Jan 26, 2020 Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015
As Reported
Selected Financial Data (US$ in millions)
Revenue 10,918  11,716  9,714  6,910  5,010  4,682 
Total assets 17,315  13,292  11,241  9,841  7,370  7,201 
Activity Ratio
Total asset turnover1 0.63 0.88 0.86 0.70 0.68 0.65
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenue 10,918  11,716  9,714  6,910  5,010  4,682 
Adjusted total assets 16,697  12,674  10,623  9,223  6,752  6,583 
Activity Ratio
Adjusted total asset turnover2 0.65 0.92 0.91 0.75 0.74 0.71

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12).

2020 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= 10,918 ÷ 17,315 = 0.63

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 10,918 ÷ 16,697 = 0.65

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. NVIDIA Corp.’s adjusted total asset turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Adjusted Financial Leverage

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Jan 26, 2020 Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015
As Reported
Selected Financial Data (US$ in millions)
Total assets 17,315  13,292  11,241  9,841  7,370  7,201 
Shareholders’ equity 12,204  9,342  7,471  5,762  4,469  4,418 
Solvency Ratio
Financial leverage1 1.42 1.42 1.50 1.71 1.65 1.63
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 16,697  12,674  10,623  9,223  6,752  6,583 
Adjusted shareholders’ equity 11,586  8,724  6,853  5,144  3,851  3,800 
Solvency Ratio
Adjusted financial leverage2 1.44 1.45 1.55 1.79 1.75 1.73

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12).

2020 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity
= 17,315 ÷ 12,204 = 1.42

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 16,697 ÷ 11,586 = 1.44

Solvency 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.		 NVIDIA Corp.’s adjusted financial leverage ratio decreased from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Equity (ROE)

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Jan 26, 2020 Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income 2,796  4,141  3,047  1,666  614  631 
Shareholders’ equity 12,204  9,342  7,471  5,762  4,469  4,418 
Profitability Ratio
ROE1 22.91% 44.33% 40.78% 28.91% 13.74% 14.27%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income 2,796  4,141  3,047  1,666  614  631 
Adjusted shareholders’ equity 11,586  8,724  6,853  5,144  3,851  3,800 
Profitability Ratio
Adjusted ROE2 24.13% 47.47% 44.46% 32.39% 15.94% 16.60%

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12).

2020 Calculations

1 ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × 2,796 ÷ 12,204 = 22.91%

2 Adjusted ROE = 100 × Net income ÷ Adjusted shareholders’ equity
= 100 × 2,796 ÷ 11,586 = 24.13%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. NVIDIA Corp.’s adjusted ROE improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Jan 26, 2020 Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income 2,796  4,141  3,047  1,666  614  631 
Total assets 17,315  13,292  11,241  9,841  7,370  7,201 
Profitability Ratio
ROA1 16.15% 31.15% 27.11% 16.93% 8.33% 8.76%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income 2,796  4,141  3,047  1,666  614  631 
Adjusted total assets 16,697  12,674  10,623  9,223  6,752  6,583 
Profitability Ratio
Adjusted ROA2 16.75% 32.67% 28.68% 18.06% 9.09% 9.58%

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12).

2020 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 2,796 ÷ 17,315 = 16.15%

2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 2,796 ÷ 16,697 = 16.75%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. NVIDIA Corp.’s adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.