Stock Analysis on Net

Paramount Global (NASDAQ:PARA)

$22.49

This company has been moved to the archive! The financial data has not been updated since May 4, 2023.

Analysis of Income Taxes

Microsoft Excel

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Income Tax Expense (Benefit)

Paramount Global, income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Federal
State and local
Foreign
Current
Federal
State and local
Foreign
Deferred
Provision (benefit) for income taxes

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).


Current Income Tax Expense
The current income tax expense demonstrates considerable volatility over the five-year period. Starting at $229 million as of December 31, 2018, it surged significantly to $760 million in 2019. This was followed by a decrease to $413 million in 2020, then an increase again to $556 million in 2021, before declining to $333 million in 2022. The fluctuations suggest variable taxable income or changes in tax regulations impacting current tax liabilities from year to year.
Deferred Income Tax Expense
The deferred income tax expense showed both positive and negative values throughout the period, indicating changes in temporary differences affecting deferred tax liabilities or assets. It began with a modest $44 million in 2018, then shifted sharply to a negative $769 million in 2019, reflecting a significant deferred tax benefit. In 2020 and 2021, the values reverted to positive amounts of $122 million and $90 million, respectively, before turning negative again at $106 million in 2022. This oscillation implies recognition of deferred tax assets and liabilities fluctuating in relation to timing differences and tax rate changes.
Provision (Benefit) for Income Taxes
The overall provision for income taxes aligns with the combined effect of current and deferred components but reveals amplified variability. It started at $273 million in 2018, shifted to a slight benefit of -$9 million in 2019, which correlates with the substantial deferred tax benefit recorded that year. Subsequently, the provision increased substantially to $535 million in 2020 and further to $646 million in 2021, before decreasing to $227 million in 2022. These trends reflect the underlying earnings performance, tax planning, and timing differences impacting total tax expense recognized in each fiscal year.

Effective Income Tax Rate (EITR)

Paramount Global, effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
U.S. federal statutory income tax rate
Effective income tax rate

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).


U.S. Federal Statutory Income Tax Rate
The statutory income tax rate remained constant at 21% throughout the entire period from 2018 to 2022, indicating no changes in federal tax legislation affecting this rate during these years.
Effective Income Tax Rate
The effective income tax rate demonstrated notable volatility over the analyzed timeframe. In 2018, the rate was 11.93%, substantially below the statutory rate. In 2019, the rate turned slightly negative at -0.27%, which may suggest the recognition of deferred tax assets or effects of tax credits exceeding taxable income. Subsequently, the rate increased to 17% in 2020, decreased again to 12.41% in 2021, and then rose to 17.93% in 2022.
This fluctuation indicates variability in taxable income or tax planning strategies affecting the effective tax burden. Despite these changes, the effective rate remained consistently below the statutory 21%, which may reflect ongoing impacts from tax incentives, losses carried forward, or other tax adjustments influencing the company’s tax expense relative to pre-tax income.

Components of Deferred Tax Assets and Liabilities

Paramount Global, components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Reserves and other accrued liabilities
Pension, postretirement and other employee benefits
Lease liability
Tax credit and loss carryforwards
Interest limitation carryforward
Capitalized costs
Other
Deferred income tax assets
Valuation allowance
Deferred income tax assets, net
Intangible assets
Unbilled licensing receivables
Lease asset
Property, equipment and other assets
Financing obligations
Other
Deferred income tax liabilities
Deferred income tax assets (liabilities), net

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).


Reserves and Other Accrued Liabilities
These liabilities increased significantly from 2018 to 2019, rising from $339 million to $540 million, followed by a decrease in 2020 and 2021. A subsequent increase occurred in 2022, reaching $430 million. This pattern suggests volatility in short-term obligations or provisions.
Pension, Postretirement and Other Employee Benefits
This category generally increased from 2018 ($492 million) to a peak in 2020 ($772 million), then declined steadily through 2022 to $534 million. The trend indicates initial growth in employee-related obligations followed by a reduction in recent years.
Lease Liability
Data began in 2019 with $531 million, followed by a decreasing trend through 2022, ending at $425 million. This suggests a gradual reduction in lease obligations over time.
Tax Credit and Loss Carryforwards
There was a notable decline from $723 million in 2018 to $394 million in 2019, with subsequent minor fluctuations maintaining a downward direction, ending at $397 million in 2022. This reflects diminishing available tax credits and loss benefits.
Interest Limitation Carryforward and Capitalized Costs
These items appeared starting in 2022 with values of $93 million and $49 million respectively, indicating new accounting or reporting for these assets or credits.
Other (Liabilities/Assets)
Initially, these amounted to $80 million in 2018, then showed a declining trend through 2022, ending at $11 million. The decrease implies a reduction in miscellaneous other liabilities or assets.
Deferred Income Tax Assets
This asset increased sharply from 2018 ($1,634 million) to peak in 2019 ($2,311 million), followed by a gradual decline to $1,939 million by 2022, suggesting changes in expected future tax benefits.
Valuation Allowance
The valuation allowance, which offsets deferred tax assets, decreased in absolute terms from -$719 million in 2018 to -$488 million in 2022, indicating a reduced estimate of uncollectible deferred tax assets over time.
Deferred Income Tax Assets, Net
After significant growth from 2018 ($915 million) to 2019 ($1,761 million), the net deferred tax assets decreased steadily through 2021, then slightly increased in 2022 to $1,451 million. This reflects the combined impacts of changes in both deferred tax assets and valuation allowances.
Intangible Assets
These negative values indicate amortization or impairment, with an increasing negative trend from -$844 million in 2018 to -$643 million in 2022. This suggests ongoing reduction in intangible asset balances, possibly through write-downs or amortization.
Unbilled Licensing Receivables
These amounts have steadily declined from -$401 million in 2018 to a negligible or zero amount by 2022, indicating a decrease or clearance of these receivables over the periods.
Lease Asset
Recorded from 2019 onwards, these assets decreased from -$467 million in 2019 to -$344 million in 2022, paralleling the reduction in lease liabilities and indicating a consistent decline in lease-related assets.
Property, Equipment and Other Assets
These assets showed increasing negative values from -$40 million in 2018 to -$180 million in 2022, suggesting ongoing depreciation or asset disposals.
Financing Obligations
Starting in 2019 at -$72 million, these obligations have remained relatively stable through 2022, fluctuating slightly around the mid-sixties to high-sixties range, indicating consistent financing liabilities.
Other Deferred Items
Appearing from 2020 onward, these other items fluctuated with -$44 million in 2020, improving to -$14 million in 2021, then increasing negatively to -$50 million in 2022, reflecting variability in miscellaneous deferred liabilities or assets.
Deferred Income Tax Liabilities
These liabilities increased slightly in absolute terms from -$1,285 million in 2018 to peaks around -$1,410 million in 2020, before stabilizing near -$1,286 million in 2022, indicating fluctuations but overall steady deferred tax liabilities.
Deferred Income Tax Assets (Liabilities), Net
This net figure shifted from a negative position of -$370 million in 2018 to positive values starting in 2019, with a gradual decrease after 2019 and stabilizing around $165 million in 2022. This indicates an improved net tax position over the years.

Deferred Tax Assets and Liabilities, Classification

Paramount Global, deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Deferred income tax assets, net
Deferred income tax liabilities

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).


Deferred Income Tax Assets, Net
The deferred income tax assets demonstrated a strong upward trend from 2018 through 2022. Starting at $29 million in 2018, the figure surged substantially to $939 million in 2019, marking a significant increase. The growth continued but at a slower pace, reaching $993 million in 2020, then advancing to $1,206 million in 2021, and finally settling at $1,242 million in 2022. Overall, this indicates a consistent accumulation of deferred tax assets over the five-year period.
Deferred Income Tax Liabilities
The deferred income tax liabilities also showed a marked increase during the same period. Beginning at $399 million in 2018, the liabilities rose to $500 million in 2019, followed by a more pronounced increase to $778 million in 2020. This growth accelerated in 2021, reaching $1,063 million, and slightly increased to $1,077 million in 2022. The pattern reflects a considerable elevation in deferred tax liabilities, especially between 2019 and 2021, subsequently stabilizing somewhat in 2022.
Overall Analysis
Both deferred income tax assets and liabilities experienced significant growth from 2018 to 2022, with the most substantial increases occurring between 2018 and 2021. The growth rates for both items slowed toward the end of the period, particularly in 2022. The parallel rise in both assets and liabilities suggests active tax position management, potentially influenced by changes in tax regulations, earnings profiles, or timing differences in income recognition. The net deferred tax position has increased, but the data does not provide enough context to ascertain the net effect without considering other balance sheet components.

Adjustments to Financial Statements: Removal of Deferred Taxes

Paramount Global, adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Adjustment to Total Assets
Total assets (as reported)
Less: Noncurrent deferred tax assets, net
Total assets (adjusted)
Adjustment to Total Liabilities
Total liabilities (as reported)
Less: Noncurrent deferred tax liabilities, net
Total liabilities (adjusted)
Adjustment to Total Paramount Stockholders’ Equity
Total Paramount stockholders’ equity (as reported)
Less: Net deferred tax assets (liabilities)
Total Paramount stockholders’ equity (adjusted)
Adjustment to Net Earnings Attributable To Paramount
Net earnings attributable to Paramount (as reported)
Add: Deferred income tax expense (benefit)
Net earnings attributable to Paramount (adjusted)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).


The financial data reveals several noteworthy trends in the company's assets, liabilities, equity, and earnings over the five-year period ending December 31, 2022.

Total Assets
Reported total assets increased significantly from $21.9 billion in 2018 to $58.6 billion in 2021, then slightly decreased to $58.4 billion in 2022. The adjusted total assets follow a similar pattern, growing steadily but remaining slightly lower than reported figures each year, reflecting consistent adjustments for deferred tax items or other accounting considerations.
Total Liabilities
Reported total liabilities more than doubled from $19.1 billion in 2018 to approximately $36.0 billion in 2019 and remained relatively stable through to 2022, with a slight decline toward $34.8 billion in 2022. Adjusted liabilities mirror this trend but are consistently lower than reported values, indicating downward adjustments likely related to income tax or other deferrals.
Total Paramount Stockholders’ Equity
Stockholders' equity demonstrated a robust increase from $2.8 billion in 2018 to a peak of $22.4 billion in 2021, followed by a moderate rise to $23.0 billion in 2022 in reported terms. Adjusted equity values are slightly higher than reported figures up to 2020 but align closely thereafter, suggesting that adjustments tended to have a more pronounced effect in earlier years.
Net Earnings Attributable to Paramount
Reported net earnings showed volatility: rising from $2.0 billion in 2018 to $3.3 billion in 2019, declining to $2.4 billion in 2020, then surging to $4.5 billion in 2021 before dropping sharply to $1.1 billion in 2022. Adjusted net earnings follow a somewhat smoother trajectory, though they mirror the same peaks and troughs, with earnings peaking in 2021 and falling significantly in 2022 to under $1.0 billion. This suggests that while adjustments reduce some earnings volatility, significant fluctuations remain inherent in core operations.

Overall, the company has experienced substantial growth in its asset base and equity over this period, particularly until 2021, while liabilities have remained relatively stable after a sharp increase early on. Earnings have shown considerable variability, with 2021 being a standout year of profitability, followed by a marked decline in 2022. Adjustments for deferred and reported income taxes slightly modify the reported figures but do not dramatically alter the overall financial trends.


Paramount Global, Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Paramount Global, adjusted financial ratios

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Total Asset Turnover
Reported total asset turnover
Adjusted total asset turnover
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).


Net Profit Margin
The reported net profit margin shows a declining trend from 13.5% in 2018 to 3.66% in 2022, with a notable dip in 2020 followed by a temporary recovery in 2021. The adjusted net profit margin follows a similar pattern, starting at 13.81% in 2018, decreasing more sharply by 2019 to 9.13%, then showing a moderate increase to 16.21% in 2021 before falling to 3.31% in 2022. This indicates volatility in profitability and a significant decline in recent years.
Total Asset Turnover
Both reported and adjusted total asset turnover ratios exhibit a downward trend over the period, starting at approximately 0.66 in 2018 and declining to just above 0.5 by 2022. This suggests a reduction in the efficiency with which assets generate revenue, albeit with a slight improvement between 2021 and 2022.
Financial Leverage
The reported financial leverage ratio declines markedly from 7.8 in 2018 to 2.53 in 2022. The adjusted leverage follows a similar decline from 6.88 to 2.5 over the same period. This significant reduction implies a decrease in the use of debt financing relative to equity, indicating a shift towards a more conservative capital structure.
Return on Equity (ROE)
Reported ROE decreases sharply from 69.9% in 2018 to 4.79% in 2022. Adjusted ROE reflects a comparable drop from 63.14% to 4.36% in the same years. Despite some fluctuations, particularly between 2019 and 2021, the overall trend shows a substantial decline in shareholder returns.
Return on Assets (ROA)
Both reported and adjusted ROA display a general downward trend from 2018 through 2022. Reported ROA falls from 8.97% to 1.89%, while adjusted ROA decreases from 9.18% to 1.75%. There is a slight recovery in 2021, but the values remain significantly lower by 2022, indicating reduced asset profitability.
Overall Analysis
The data indicate a consistent decline in profitability and efficiency measures over the five-year period. Key profitability ratios, including net profit margin, ROE, and ROA, have all decreased considerably, signaling challenges in sustaining earnings and asset productivity. The decline in financial leverage suggests less reliance on debt, which may reflect a strategic response to risk or changing capital market conditions. Despite a minor uptick in some ratios around 2021, the general direction points to weakening financial performance by the end of 2022.

Paramount Global, Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to Paramount
Revenues
Profitability Ratio
Net profit margin1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings attributable to Paramount
Revenues
Profitability Ratio
Adjusted net profit margin2

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

1 Net profit margin = 100 × Net earnings attributable to Paramount ÷ Revenues
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net earnings attributable to Paramount ÷ Revenues
= 100 × ÷ =


Reported Net Earnings Attributable to Paramount
The reported net earnings exhibit a fluctuating pattern over the analyzed period. Earnings increased significantly from 1,960 million in 2018 to a peak of 3,308 million in 2019. This was followed by a decline to 2,422 million in 2020. Subsequently, there was a strong recovery to 4,543 million in 2021, marking the highest value within the timeframe. However, in 2022, reported earnings experienced a sharp decrease, falling to 1,104 million, the lowest level since 2018.
Adjusted Net Earnings Attributable to Paramount
Adjusted net earnings show a somewhat more stable trend compared to reported earnings, with a gradual increase from 2,004 million in 2018 to 2,544 million in 2020. A pronounced increase occurred in 2021, with adjusted earnings reaching 4,633 million, consistent with the peak observed in reported earnings. Nevertheless, similar to reported figures, adjusted earnings dropped substantially in 2022 to 998 million, the lowest in the period studied.
Reported Net Profit Margin
The reported net profit margin demonstrates variability across the years. Starting at 13.5% in 2018, it slightly decreased to 11.89% in 2019 and then declined further to 9.58% in 2020. In 2021, there was a notable rebound to 15.89%, the highest margin in the given period. By contrast, the margin contracted sharply in 2022 to 3.66%, indicating reduced profitability relative to revenues.
Adjusted Net Profit Margin
The adjusted net profit margin trends similarly to the reported margin with some differences in magnitude. It began at 13.81% in 2018 and decreased to 9.13% in 2019, followed by a mild increase to 10.06% in 2020. The margin peaked at 16.21% in 2021, surpassing the reported margin peak percentage. In 2022, the margin decreased sharply to 3.31%, marking the lowest adjusted profitability margin in the timeframe.
Summary
Overall, both reported and adjusted net earnings and profit margins demonstrate increased volatility in recent years. Earnings and margins generally improved until 2021, with 2021 representing the peak of profitability. The sharp decline in 2022 for both reported and adjusted figures indicates a significant reduction in profitability and earnings performance. Adjusted earnings and margins tend to follow the same patterns as reported figures but exhibit slightly different levels, suggesting the impact of exclusions or adjustments in financial results.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Revenues
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenues
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= ÷ =


Total Assets
The reported total assets experienced a significant increase from US$21,859 million in 2018 to US$49,519 million in 2019, marking a notable expansion. From 2019 onward, the growth continued but at a more moderate pace, reaching US$58,620 million in 2021 before slightly declining to US$58,393 million in 2022. The adjusted total assets follow a similar pattern, with a sharp rise in 2019, followed by gradual increases until 2021 and a small decrease in 2022. This trend may indicate large acquisitions or asset revaluations occurring in 2019, followed by stabilization.
Total Asset Turnover
The reported total asset turnover ratio decreased steadily from 0.66 in 2018 to 0.48 in 2020, suggesting a diminishing efficiency in generating sales from assets during this period. From 2020 onwards, the ratio showed slight improvement, rising to 0.52 by 2022 but still below the initial levels in 2018. The adjusted total asset turnover displays a consistent trend with reported figures, declining from 0.66 in 2018 to 0.49 in 2020 and then modestly increasing to 0.53 in 2022. This progression indicates some recovery in asset utilization efficiency after the low point in 2020, but the overall efficiency remains lower than at the start of the analysis period.
Observations
The data reveals a period of rapid asset growth around 2019, potentially due to strategic investments or acquisitions, followed by relative stabilization. During the same timeframe, asset turnover ratios declined, indicating that the increased asset base initially did not translate into proportional revenue generation. The gradual improvement in turnover post-2020 may reflect efforts to optimize asset use or revenue enhancement strategies, although the turnover ratio has not returned to the 2018 levels. This pattern highlights a trade-off between asset accumulation and operational efficiency within the observed period.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Total assets
Total Paramount stockholders’ equity
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted total Paramount stockholders’ equity
Solvency Ratio
Adjusted financial leverage2

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

1 Financial leverage = Total assets ÷ Total Paramount stockholders’ equity
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Paramount stockholders’ equity
= ÷ =


The financial data over the five-year period reveals several notable trends in the company's asset base, equity position, and leverage ratios.

Total Assets
Reported total assets exhibited a significant increase from 21,859 million US dollars in 2018 to a peak of 58,620 million in 2021, followed by a slight decline to 58,393 million in 2022. The adjusted total assets closely mirror this pattern but reflect marginally lower values each year, maintaining a consistent adjustment gap.
Stockholders’ Equity
Reported stockholders’ equity grew markedly from 2,804 million in 2018 to 22,402 million in 2021, with a smaller increase to 23,036 million in 2022. Adjusted equity values present a similar trajectory, starting at 3,174 million in 2018 and rising steadily to 22,259 million in 2021 and 22,871 million in 2022, remaining slightly below reported figures except for the initial year.
Financial Leverage
The reported financial leverage ratio demonstrates a clear downward trend over the period, decreasing from 7.8 in 2018 to 2.53 by 2022, indicating a strengthening equity base relative to total assets. The adjusted financial leverage shows a comparable pattern, beginning at 6.88 in 2018 and decreasing to 2.5 in 2022, consistently tracking closely with reported leverage but slightly lower in the earliest years.

Overall, the data indicates substantial growth in both assets and equity, accompanied by a significant reduction in financial leverage, suggesting improved capitalization and reduced reliance on debt over the five-year span. The adjustment between reported and adjusted figures remains relatively stable, confirming the consistency of the underlying financial position after accounting for deferred income tax adjustments.


Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to Paramount
Total Paramount stockholders’ equity
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings attributable to Paramount
Adjusted total Paramount stockholders’ equity
Profitability Ratio
Adjusted ROE2

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

1 ROE = 100 × Net earnings attributable to Paramount ÷ Total Paramount stockholders’ equity
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net earnings attributable to Paramount ÷ Adjusted total Paramount stockholders’ equity
= 100 × ÷ =


Net Earnings Trends
Reported net earnings attributable to the company showed considerable volatility over the observed five-year period. Beginning at a relatively strong level of $1,960 million in 2018, earnings increased sharply in 2019 to $3,308 million before declining to $2,422 million in 2020. A significant recovery occurred in 2021, with net earnings reaching a peak of $4,543 million. However, 2022 saw a dramatic decrease, with reported net earnings dropping to $1,104 million, the lowest in the period except for 2018.
Adjusted net earnings followed a somewhat similar pattern but demonstrated less pronounced fluctuations. The adjusted figures started at $2,004 million in 2018, increased moderately to $2,539 million in 2019, and remained stable around $2,544 million in 2020. Substantial growth was observed in 2021, with adjusted net earnings climbing to $4,633 million, followed by a decline to $998 million in 2022, marking a steep decrease indicative of underlying business challenges or extraordinary items in that year.
Stockholders’ Equity Trends
Reported total stockholders’ equity experienced consistent growth throughout the period. Starting from $2,804 million in 2018, it saw a marked increase to $13,207 million by 2019, further expanding steadily over the subsequent years to reach $23,036 million in 2022. This reflects considerable strengthening of the equity base over time.
Adjusted total stockholders’ equity mirrored the reported trend closely but at slightly higher values. Beginning at $3,174 million in 2018, it rose substantially to $12,768 million in 2019 and continued its upward trajectory, reaching $22,871 million by the end of 2022. This indicates that adjustments had a moderate impact on equity values but did not alter the overall positive growth trend.
Return on Equity (ROE) Patterns
Reported ROE demonstrated a declining trend after peaking in 2018. The rate started extremely high at 69.9% in 2018, decreased sharply to 25.05% in 2019, and continued declining to 15.76% in 2020. A temporary recovery occurred in 2021 when ROE increased to 20.28%, but this was followed by a substantial drop to 4.79% in 2022, the lowest point in the period reflecting reduced profitability relative to equity.
Adjusted ROE values followed a similar trajectory with slightly lower percentages throughout. Starting at 63.14% in 2018, ROE declined to 19.89% in 2019 and stabilized somewhat around 16.79% in 2020. In 2021, there was a mild increase to 20.81%, which then sharply dropped to 4.36% in 2022. This pattern aligns with the adjusted net earnings and equity trends, emphasizing reduced returns on equity in the most recent year.
Overall Insights
The data reveal a company experiencing significant fluctuations in profitability, particularly evidenced by the sharp rises and falls in both reported and adjusted net earnings. Despite these earnings variations, the equity base has grown consistently, indicating ongoing capital accumulation or retained earnings. The return on equity metrics reflect the impact of earnings volatility on profitability relative to equity, with a stark decline in 2022 highlighting potentially adverse conditions affecting operational performance or exceptional charges.
The adjustments to reported figures generally moderate the earnings and ROE metrics, suggesting the presence of items distorting the raw financial results. However, the adjusted data confirm the underlying trend of volatility in earnings and declining profitability in the most recent fiscal year despite steady equity growth.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to Paramount
Total assets
Profitability Ratio
ROA1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings attributable to Paramount
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

1 ROA = 100 × Net earnings attributable to Paramount ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Adjusted net earnings attributable to Paramount ÷ Adjusted total assets
= 100 × ÷ =


Net Earnings Trends
Reported net earnings showed significant fluctuations over the observed periods. After an initial increase from 1,960 million US$ in 2018 to 3,308 million US$ in 2019, earnings declined to 2,422 million US$ in 2020, followed by a sharp rise to 4,543 million US$ in 2021. In 2022, a substantial decrease took place, dropping to 1,104 million US$. Adjusted net earnings presented a somewhat smoother trend, increasing from 2,004 million US$ in 2018 to 2,539 million US$ in 2019, then maintaining a similar level around 2,544 million US$ in 2020. A pronounced increase occurred in 2021, reaching 4,633 million US$, before a decline to 998 million US$ in 2022.
Total Assets Analysis
Total assets, both reported and adjusted, demonstrated consistent growth from 2018 through 2021. Reported total assets rose from 21,859 million US$ in 2018 to 58,620 million US$ in 2021, with a slight decrease to 58,393 million US$ in 2022. Adjusted total assets exhibited a parallel trend, increasing from 21,830 million US$ in 2018 to 57,414 million US$ in 2021, followed by a marginal decrease to 57,151 million US$ in 2022. This suggests overall asset base expansion throughout the majority of the period, stabilizing or slightly contracting in the latest year.
Return on Assets (ROA) Patterns
Reported ROA experienced volatility, initially declining from 8.97% in 2018 to 6.68% in 2019 and further to 4.6% in 2020, then rising to 7.75% in 2021, before a sharp decline to 1.89% in 2022. Adjusted ROA followed a similar pattern, decreasing from 9.18% in 2018 to 5.23% in 2019, slightly increasing to 4.92% in 2020, peaking at 8.07% in 2021, and falling to 1.75% in 2022. These trends indicate fluctuating profitability relative to asset base, with 2021 marked by improved asset efficiency, followed by a notable drop in 2022.
Overall Insights
The financial data reveal periods of considerable volatility in earnings and profitability, despite the steady growth in asset size through much of the timeline. The peak years, particularly 2021, reflect enhanced profitability and efficiency, while the sharp declines in 2022 across earnings and ROA point to emerging challenges or significant changes affecting the financial performance. The close alignment between reported and adjusted figures suggests consistent adjustments for deferred income taxes and indicates that underlying trends remain robust across both metrics.