Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

PayPal Holdings Inc., balance sheet: goodwill and intangible assets

US$ in millions

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Goodwill	11,209)	11,454)	9,135)	6,212)	6,284)
Customer lists and user base	1,664)	1,726)	1,206)	1,114)	1,134)
Marketing related	395)	405)	321)	294)	301)
Developed technology	1,099)	1,109)	999)	445)	453)
All other	438)	454)	449)	436)	245)
Intangible assets, gross carrying amount	3,596)	3,694)	2,975)	2,289)	2,133)
Accumulated amortization	(2,808)	(2,362)	(1,927)	(1,511)	(1,308)
Intangible assets, net carrying amount	788)	1,332)	1,048)	778)	825)
Goodwill and intangible assets	11,997)	12,786)	10,183)	6,990)	7,109)

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).

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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.	PayPal Holdings Inc. goodwill increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.
Intangible assets, net carrying amount	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	PayPal Holdings Inc. intangible assets, net carrying amount increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.
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.	PayPal Holdings Inc. goodwill and intangible assets increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

PayPal Holdings Inc., adjustments to financial statements

US$ in millions

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Adjustment to Total Assets
Total assets (as reported)	78,717)	75,803)	70,379)	51,333)	43,332)
Less: Goodwill	11,209)	11,454)	9,135)	6,212)	6,284)
Total assets (adjusted)	67,508)	64,349)	61,244)	45,121)	37,048)
Adjustment to Total PayPal Stockholders’ Equity
Total PayPal stockholders’ equity (as reported)	20,274)	21,727)	20,019)	16,885)	15,386)
Less: Goodwill	11,209)	11,454)	9,135)	6,212)	6,284)
Total PayPal stockholders’ equity (adjusted)	9,065)	10,273)	10,884)	10,673)	9,102)

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).

PayPal Holdings Inc., Financial Data: Reported vs. Adjusted

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PayPal Holdings Inc., adjusted financial ratios

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Total Asset Turnover
Reported total asset turnover	0.35	0.33	0.30	0.35	0.36
Adjusted total asset turnover	0.41	0.39	0.35	0.39	0.42
Financial Leverage
Reported financial leverage	3.88	3.49	3.52	3.04	2.82
Adjusted financial leverage	7.45	6.26	5.63	4.23	4.07
Return on Equity (ROE)
Reported ROE	11.93%	19.19%	20.99%	14.56%	13.37%
Adjusted ROE	26.69%	40.58%	38.61%	23.04%	22.60%
Return on Assets (ROA)
Reported ROA	3.07%	5.50%	5.97%	4.79%	4.75%
Adjusted ROA	3.58%	6.48%	6.86%	5.45%	5.55%

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).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	PayPal Holdings Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.
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.	PayPal Holdings Inc. adjusted financial leverage ratio increased from 2020 to 2021 and from 2021 to 2022.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	PayPal Holdings Inc. adjusted ROE improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	PayPal Holdings Inc. adjusted ROA deteriorated from 2020 to 2021 and from 2021 to 2022.

PayPal Holdings Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net revenues	27,518)	25,371)	21,454)	17,772)	15,451)
Total assets	78,717)	75,803)	70,379)	51,333)	43,332)
Activity Ratio
Total asset turnover¹	0.35	0.33	0.30	0.35	0.36
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net revenues	27,518)	25,371)	21,454)	17,772)	15,451)
Adjusted total assets	67,508)	64,349)	61,244)	45,121)	37,048)
Activity Ratio
Adjusted total asset turnover²	0.41	0.39	0.35	0.39	0.42

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 = Net revenues ÷ Total assets
= 27,518 ÷ 78,717 = 0.35

² Adjusted total asset turnover = Net revenues ÷ Adjusted total assets
= 27,518 ÷ 67,508 = 0.41

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	PayPal Holdings Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.

	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	78,717)	75,803)	70,379)	51,333)	43,332)
Total PayPal stockholders’ equity	20,274)	21,727)	20,019)	16,885)	15,386)
Solvency Ratio
Financial leverage¹	3.88	3.49	3.52	3.04	2.82
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets	67,508)	64,349)	61,244)	45,121)	37,048)
Adjusted total PayPal stockholders’ equity	9,065)	10,273)	10,884)	10,673)	9,102)
Solvency Ratio
Adjusted financial leverage²	7.45	6.26	5.63	4.23	4.07

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 PayPal stockholders’ equity
= 78,717 ÷ 20,274 = 3.88

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total PayPal stockholders’ equity
= 67,508 ÷ 9,065 = 7.45

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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.	PayPal Holdings Inc. adjusted financial leverage ratio increased from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	2,419)	4,169)	4,202)	2,459)	2,057)
Total PayPal stockholders’ equity	20,274)	21,727)	20,019)	16,885)	15,386)
Profitability Ratio
ROE¹	11.93%	19.19%	20.99%	14.56%	13.37%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income	2,419)	4,169)	4,202)	2,459)	2,057)
Adjusted total PayPal stockholders’ equity	9,065)	10,273)	10,884)	10,673)	9,102)
Profitability Ratio
Adjusted ROE²	26.69%	40.58%	38.61%	23.04%	22.60%

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 income ÷ Total PayPal stockholders’ equity
= 100 × 2,419 ÷ 20,274 = 11.93%

² Adjusted ROE = 100 × Net income ÷ Adjusted total PayPal stockholders’ equity
= 100 × 2,419 ÷ 9,065 = 26.69%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	PayPal Holdings Inc. adjusted ROE improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	2,419)	4,169)	4,202)	2,459)	2,057)
Total assets	78,717)	75,803)	70,379)	51,333)	43,332)
Profitability Ratio
ROA¹	3.07%	5.50%	5.97%	4.79%	4.75%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income	2,419)	4,169)	4,202)	2,459)	2,057)
Adjusted total assets	67,508)	64,349)	61,244)	45,121)	37,048)
Profitability Ratio
Adjusted ROA²	3.58%	6.48%	6.86%	5.45%	5.55%

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 income ÷ Total assets
= 100 × 2,419 ÷ 78,717 = 3.07%

² Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 2,419 ÷ 67,508 = 3.58%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	PayPal Holdings Inc. adjusted ROA deteriorated from 2020 to 2021 and from 2021 to 2022.

PayPal Holdings Inc. (NASDAQ:PYPL)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

PayPal Holdings Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

PayPal Holdings Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)