Stock Analysis on Net

Walgreens Boots Alliance Inc. (NASDAQ:WBA)

This company has been moved to the archive! The financial data has not been updated since July 9, 2020.

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

Walgreens Boots Alliance Inc., balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Customer relationships and loyalty card holders 4,290 4,235 2,510 2,799 3,024 1,079
Favorable lease interests and non-compete agreements 654 680 523 619 594 533
Trade names and trademarks 461 489 504 532 675 191
Purchasing and payer contracts 382 390 391 94 94 301
Other amortizable intangible assets 4
Gross amortizable intangible assets 5,787 5,794 3,928 4,044 4,387 2,108
Accumulated amortization (2,021) (1,640) (1,341) (1,439) (1,090) (936)
Amortizable intangible assets, net 3,766 4,154 2,587 2,605 3,297 1,172
Trade names and trademarks 5,232 5,557 5,514 5,604 6,590 8
Pharmacy licenses 1,878 2,072 2,055 2,093 2,464
Indefinite-lived intangible assets 7,110 7,629 7,569 7,697 9,054 8
Intangible assets, net 10,876 11,783 10,156 10,302 12,351 1,180
Goodwill 16,560 16,914 15,632 15,527 16,372 2,359
Goodwill and other intangible assets 27,436 28,697 25,788 25,829 28,723 3,539

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

Item Description The company
Intangible assets, net Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Walgreens Boots Alliance Inc. intangible assets, net increased from 2017 to 2018 but then slightly decreased from 2018 to 2019 not reaching 2017 level.
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. Walgreens Boots Alliance Inc. goodwill increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.
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. Walgreens Boots Alliance Inc. goodwill and other intangible assets increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.

Adjustments to Financial Statements: Removal of Goodwill

Walgreens Boots Alliance Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Adjustment to Total Assets
Total assets (as reported) 67,598 68,124 66,009 72,688 68,782 37,182
Less: Goodwill 16,560 16,914 15,632 15,527 16,372 2,359
Total assets (adjusted) 51,038 51,210 50,377 57,161 52,410 34,823
Adjustment to Total Walgreens Boots Alliance, Inc. Shareholders’ Equity
Total Walgreens Boots Alliance, Inc. shareholders’ equity (as reported) 23,512 26,007 27,466 29,880 30,861 20,457
Less: Goodwill 16,560 16,914 15,632 15,527 16,372 2,359
Total Walgreens Boots Alliance, Inc. shareholders’ equity (adjusted) 6,952 9,093 11,834 14,353 14,489 18,098

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).


Walgreens Boots Alliance Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Goodwill (Summary)

Walgreens Boots Alliance Inc., adjusted financial ratios

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Total Asset Turnover
Reported total asset turnover 2.02 1.93 1.79 1.61 1.50 2.05
Adjusted total asset turnover 2.68 2.57 2.35 2.05 1.97 2.19
Financial Leverage
Reported financial leverage 2.88 2.62 2.40 2.43 2.23 1.82
Adjusted financial leverage 7.34 5.63 4.26 3.98 3.62 1.92
Return on Equity (ROE)
Reported ROE 16.94% 19.32% 14.85% 13.97% 13.67% 9.44%
Adjusted ROE 57.28% 55.25% 34.46% 29.07% 29.13% 10.68%
Return on Assets (ROA)
Reported ROA 5.89% 7.37% 6.18% 5.74% 6.14% 5.20%
Adjusted ROA 7.80% 9.81% 8.09% 7.30% 8.05% 5.55%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Walgreens Boots Alliance Inc. adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.
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.
Walgreens Boots Alliance Inc. adjusted financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Walgreens Boots Alliance Inc. adjusted ROE improved from 2017 to 2018 and from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Walgreens Boots Alliance Inc. adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Walgreens Boots Alliance Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Sales 136,866 131,537 118,214 117,351 103,444 76,392
Total assets 67,598 68,124 66,009 72,688 68,782 37,182
Activity Ratio
Total asset turnover1 2.02 1.93 1.79 1.61 1.50 2.05
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Sales 136,866 131,537 118,214 117,351 103,444 76,392
Adjusted total assets 51,038 51,210 50,377 57,161 52,410 34,823
Activity Ratio
Adjusted total asset turnover2 2.68 2.57 2.35 2.05 1.97 2.19

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

1 Total asset turnover = Sales ÷ Total assets
= 136,866 ÷ 67,598 = 2.02

2 Adjusted total asset turnover = Sales ÷ Adjusted total assets
= 136,866 ÷ 51,038 = 2.68

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Walgreens Boots Alliance Inc. adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Financial Leverage

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Total assets 67,598 68,124 66,009 72,688 68,782 37,182
Total Walgreens Boots Alliance, Inc. shareholders’ equity 23,512 26,007 27,466 29,880 30,861 20,457
Solvency Ratio
Financial leverage1 2.88 2.62 2.40 2.43 2.23 1.82
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 51,038 51,210 50,377 57,161 52,410 34,823
Adjusted total Walgreens Boots Alliance, Inc. shareholders’ equity 6,952 9,093 11,834 14,353 14,489 18,098
Solvency Ratio
Adjusted financial leverage2 7.34 5.63 4.26 3.98 3.62 1.92

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

1 Financial leverage = Total assets ÷ Total Walgreens Boots Alliance, Inc. shareholders’ equity
= 67,598 ÷ 23,512 = 2.88

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Walgreens Boots Alliance, Inc. shareholders’ equity
= 51,038 ÷ 6,952 = 7.34

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.
Walgreens Boots Alliance Inc. adjusted financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Equity (ROE)

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc. 3,982 5,024 4,078 4,173 4,220 1,932
Total Walgreens Boots Alliance, Inc. shareholders’ equity 23,512 26,007 27,466 29,880 30,861 20,457
Profitability Ratio
ROE1 16.94% 19.32% 14.85% 13.97% 13.67% 9.44%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc. 3,982 5,024 4,078 4,173 4,220 1,932
Adjusted total Walgreens Boots Alliance, Inc. shareholders’ equity 6,952 9,093 11,834 14,353 14,489 18,098
Profitability Ratio
Adjusted ROE2 57.28% 55.25% 34.46% 29.07% 29.13% 10.68%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

1 ROE = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Total Walgreens Boots Alliance, Inc. shareholders’ equity
= 100 × 3,982 ÷ 23,512 = 16.94%

2 Adjusted ROE = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Adjusted total Walgreens Boots Alliance, Inc. shareholders’ equity
= 100 × 3,982 ÷ 6,952 = 57.28%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Walgreens Boots Alliance Inc. adjusted ROE improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc. 3,982 5,024 4,078 4,173 4,220 1,932
Total assets 67,598 68,124 66,009 72,688 68,782 37,182
Profitability Ratio
ROA1 5.89% 7.37% 6.18% 5.74% 6.14% 5.20%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc. 3,982 5,024 4,078 4,173 4,220 1,932
Adjusted total assets 51,038 51,210 50,377 57,161 52,410 34,823
Profitability Ratio
Adjusted ROA2 7.80% 9.81% 8.09% 7.30% 8.05% 5.55%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

1 ROA = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Total assets
= 100 × 3,982 ÷ 67,598 = 5.89%

2 Adjusted ROA = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Adjusted total assets
= 100 × 3,982 ÷ 51,038 = 7.80%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Walgreens Boots Alliance Inc. adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.