AbbVie Inc. (NYSE:ABBV)

Goodwill

The goodwill balance shows a gradual decline from 2020 through 2022, decreasing from $33,124 million to $32,156 million. This was followed by a slight recovery in 2023 to $32,293 million and a notable increase in 2024 to $34,956 million, indicating potential acquisitions or revaluations contributing to higher goodwill in the latest period.

Developed Product Rights

Developed product rights experienced a mild increase from 2020 ($87,707 million) to 2021 ($88,945 million), followed by a decline in 2022 ($87,698 million) and a significant drop in 2023 to $75,142 million. In 2024, there was a partial recovery to $81,428 million. This pattern suggests potential impairment charges or disposals followed by some reinvestment or additions in product rights.

License Agreements

License agreements remained relatively stable over the period, with slight fluctuations. The value rose from $7,828 million in 2020 to $8,487 million in 2021, remained steady around $8,474 million in 2022, then decreased slightly to $8,191 million in 2023, and marginally increased to $8,315 million in 2024. This steadiness indicates maintained contractual rights with minor changes.

Definite-lived Intangible Assets, Gross Carrying Amount

The gross carrying amount of definite-lived intangible assets marginally increased from 2020 ($95,535 million) to 2021 ($97,432 million), then declined consistently to $96,172 million in 2022 and more sharply to $83,333 million in 2023 before rebounding to $89,743 million in 2024. This trend suggests some asset disposals or amortization exceeding additions in 2023, with reinvestment or acquisition activity resuming in 2024.

Accumulated Amortization

Accumulated amortization presents a consistently growing negative balance, increasing in absolute terms from -$14,536 million in 2020 to -$34,877 million in 2024. Although there was a slight decrease in amortization from 2022 (-$29,645 million) to 2023 (-$28,026 million), the overall rising amortization reflects ongoing expense recognition against definite-lived intangible assets over time.

Definite-lived Intangible Assets, Net Carrying Amount

The net carrying amount of definite-lived intangible assets declined steadily from $80,999 million in 2020 to $55,307 million in 2023, followed by a minor decrease to $54,866 million in 2024. This decline is consistent with the pattern of accumulated amortization outweighing additions, indicating a shrinking base of net definite-lived intangible assets.

Indefinite-lived Intangible Assets

Indefinite-lived intangible assets fluctuated notably over the period, starting at $1,877 million in 2020, dropping to $670 million in 2021, with a slight increase in 2022 ($912 million), then falling back to $303 million in 2023, and rising sharply to $5,202 million in 2024. This volatility might point to reclassifications, impairments, or acquisitions impacting indefinite-lived assets significantly in the latest year.

Intangible Assets, Net

The net intangible assets decreased steadily from $82,876 million in 2020 to $55,610 million in 2023, followed by a moderate increase to $60,068 million in 2024. This trajectory reflects the combined effect of asset amortization, disposals, impairments, and new acquisitions or investments in intangible assets.

Goodwill and Intangible Assets

The aggregate of goodwill and intangible assets rose from $116,000 million in 2020 to $108,330 million in 2021, and then declined each year through 2023 to $87,903 million. In 2024, there was a notable recovery to $95,024 million. This overall downward trend followed by recent growth suggests a period of asset reduction or impairment followed by strategic investments or acquisitions boosting asset values.

The data presents a clear trend of declining total assets and stockholders' equity over the five-year period from 2020 to 2024, both in reported and goodwill adjusted terms.

Reported Total Assets

The reported total assets decreased steadily from 150,565 million US dollars in 2020 to 135,161 million US dollars in 2024. The decline was consistent year over year, reflecting a gradual reduction of approximately 10% over the period. This downward trend indicates a contraction in the scale of total assets held by the entity.

Adjusted Total Assets

The goodwill adjusted total assets also declined across the same period, falling from 117,441 million US dollars in 2020 to 100,205 million US dollars in 2024. This decrease is slightly more pronounced than that observed in reported total assets, amounting to roughly a 15% reduction. The adjustment for goodwill appears to reveal a more significant contraction in core asset value.

Reported Stockholders’ Equity

The reported stockholders' equity followed a less steady path. It initially increased from 13,076 million US dollars in 2020 to a peak of 17,254 million US dollars in 2022. However, this upward trend reversed sharply thereafter, with equity declining to 10,360 million in 2023 and further plummeting to 3,325 million US dollars in 2024. This sharp decline in the latter years may signal profitability issues, increased liabilities, or other fundamental changes affecting shareholder value.

Adjusted Stockholders’ Equity

The goodwill adjusted stockholders’ equity values are negative throughout the entire period, indicating that the company’s liabilities exceed its adjusted assets when goodwill is excluded. Although the negative equity shows an improvement from -20,048 million US dollars in 2020 to -14,902 million in 2022, it then deteriorates again considerably to -31,631 million US dollars in 2024. This wide fluctuation suggests substantial volatility in the company's underlying net asset value and may point to significant goodwill impairments or other accounting adjustments.

Overall, the data indicates a reduction in asset base and a precarious position for shareholders' equity once goodwill adjustments are considered. The deterioration in reported equity in the last two years, combined with the consistently negative adjusted equity, could be cause for further investigation into the company’s financial health, asset quality, and liability structure.

Total Asset Turnover

The reported total asset turnover exhibited a generally positive trend from 2020 to 2024, starting at 0.3 and increasing to 0.42 by 2024, with a minor dip observed in 2023. The adjusted total asset turnover shows a similar upward trajectory but at consistently higher levels, rising from 0.39 in 2020 to 0.56 in 2024. This indicates an improvement in asset utilization efficiency over the analyzed period, with the adjustment for goodwill further emphasizing stronger operational performance.

Financial Leverage

The reported financial leverage ratio displayed volatility across the years. It decreased significantly from 11.51 in 2020 to 8.04 in 2022, suggesting a reduction in reliance on debt financing or improved capital structure. However, there was a sharp increase in subsequent years, reaching an extremely high ratio of 40.65 in 2024. This sudden spike may signal elevated financial risk or a significant change in capital financing strategy. Adjusted financial leverage data are unavailable, limiting further insight in this regard.

Return on Equity (ROE)

The reported ROE showed marked fluctuations over the period. Starting at 35.3% in 2020, it peaked sharply at 74.91% in 2021 and then declined gradually to 46.94% in 2023 before rising dramatically to 128.66% in 2024. These pronounced changes suggest variable profitability relative to shareholder equity, likely influenced by changes in net income, equity levels, or financial leverage as suggested by the leverage spike in 2024. No adjusted ROE data are provided for comparison.

Return on Assets (ROA)

Reported ROA increased between 2020 and 2022, from 3.07% to 8.53%, reflecting improved earnings relative to total assets. However, it declined sharply thereafter to 3.17% by 2024. Adjusted ROA figures, which exclude goodwill effects, parallel this trend but at notably higher levels, rising from 3.93% in 2020 to 11.1% in 2022, then decreasing to 4.27% in 2024. This pattern indicates that asset performance excluding goodwill contributions peaked in 2022 and then moderated, underscoring the impact of asset composition and profitability changes over time.

The data reveals a declining trend in total assets for both reported and adjusted figures over the five-year period ending in 2024. Reported total assets decreased from 150,565 million US dollars in 2020 to 135,161 million in 2024, showing a gradual contraction. Similarly, adjusted total assets, which exclude goodwill, also declined from 117,441 million US dollars in 2020 to 100,205 million in 2024, indicating a consistent reduction in tangible asset base.

Conversely, asset turnover ratios demonstrate an improving efficiency in utilizing assets to generate revenues. The reported total asset turnover ratio increased from 0.30 in 2020 to 0.42 in 2024, with a noticeable peak of 0.42 in 2022 and a slight dip in 2023. Adjusted total asset turnover, which factors out goodwill, exhibited a stronger improvement, rising from 0.39 in 2020 to 0.56 in 2024. This upward trajectory suggests enhanced effectiveness in the use of adjusted assets to produce sales or revenue over the period.

Total Assets

A steady decline is observed in both reported and adjusted total assets, implying a reduction in the asset base.

Reported Total Asset Turnover

The ratio improved from 0.30 to 0.42, reflecting better overall asset utilization despite minor fluctuations.

Adjusted Total Asset Turnover

A more pronounced increase from 0.39 to 0.56 indicates significantly improved efficiency when excluding goodwill.

The analysis of the available financial data over the five-year period reveals several notable trends concerning assets, equity, and financial leverage.

Total Assets

Reported total assets showed a general downward trend from 150,565 million US dollars at the end of 2020 to 135,161 million US dollars by the end of 2024. This decline indicates a contraction of approximately 10.3% over the period. Adjusted total assets, which presumably exclude goodwill or other intangible assets, also followed a decreasing trajectory, declining from 117,441 million US dollars in 2020 to 100,205 million US dollars in 2024, representing a reduction of about 14.7%.

Stockholders’ Equity

Reported stockholders' equity initially increased from 13,076 million US dollars in 2020 to a peak of 17,254 million US dollars in 2022, suggesting strengthening equity positions or retained earnings growth during those initial years. However, a significant decline occurred thereafter, falling sharply to 3,325 million US dollars by the end of 2024. Adjusted stockholders’ equity presents a contrasting and consistently negative profile, decreasing from -20,048 million US dollars in 2020 to -31,631 million US dollars in 2024. This negative adjusted equity could indicate substantial goodwill impairment or other intangible asset write-downs severely impacting the net equity position when adjustments are considered.

Financial Leverage

Reported financial leverage ratios exhibit high volatility across the analyzed period. The ratio decreased from 11.51 in 2020 to 8.04 in 2022, reflecting a reduction in leverage or an increase in equity relative to liabilities. However, thereafter, the ratio surged dramatically to 13.0 in 2023 and further to 40.65 in 2024, pointing to a significant increase in leverage and potentially heightened financial risk. Adjusted financial leverage data are unavailable, limiting further insights from an adjusted perspective.

Overall, the data suggests a contraction in asset base alongside complex equity changes, where initial improvement in reported equity was followed by a steep decline. The increasing financial leverage in the latest periods accentuates the risk profile of the entity, likely linked to diminished equity levels. The notable discrepancy between reported and adjusted equity figures indicates underlying issues possibly related to goodwill or intangible assets which should be further investigated for a comprehensive financial risk assessment.

The financial data reveals divergent trends between reported and adjusted figures over the five-year period from 2020 to 2024.

Stockholders’ Equity

Reported stockholders’ equity exhibited a generally positive trend from 2020 through 2022, increasing from 13,076 million US dollars to 17,254 million US dollars. However, a sharp decline is observed in 2023, dropping to 10,360 million US dollars, followed by a further substantial decrease to 3,325 million US dollars in 2024. This significant reduction in the latter years points to either large distributions, write-downs, or accumulated losses impacting equity.

Conversely, adjusted stockholders’ equity values are negative throughout the entire time frame and display a worsening trend. The adjusted equity improved somewhat between 2020 (-20,048 million US dollars) and 2022 (-14,902 million US dollars), but this was followed by a substantial deterioration in 2023 (-21,933 million US dollars) and an even more pronounced decline in 2024 to -31,631 million US dollars. The persistent negative adjusted equity indicates significant adjustments, likely related to goodwill or intangible asset impairments, that impact the company’s net asset position adversely.

Return on Equity (ROE)

Reported ROE shows an overall high level of profitability from equity, with values being quite elevated and volatile. Starting at 35.3% in 2020, ROE surged to 74.91% in 2021 and remained high at 68.6% in 2022. Despite a decrease to 46.94% in 2023, the ratio sharply rose again to 128.66% in 2024, indicating extraordinarily high returns on shareholders’ equity in the latest year. This volatile pattern suggests earnings performance and equity base fluctuated substantially over the period, likely influenced by the significant changes in equity levels observed.

Adjusted ROE data is unavailable, which limits the ability to directly assess profitability after adjustments related to goodwill and other intangible assets.

In summary, the data portray a company experiencing significant fluctuations in equity and returns on equity, with reported equity and ROE demonstrating both growth and sharp reversals. Adjusted equity figures consistently indicate a negative net asset base, with worsening trends in recent years, suggesting that adjustments for goodwill and potentially other intangibles substantially diminish the company's net worth and potentially its perceived financial health. The absence of adjusted ROE data limits deeper analysis into profitability considering these adjustments.

Total Assets

There is a consistent declining trend in both reported and adjusted total assets from 2020 to 2024. Reported total assets decreased from US$150,565 million in 2020 to US$135,161 million in 2024, representing an overall reduction of approximately 10.2%. Adjusted total assets, which exclude goodwill, also declined steadily from US$117,441 million in 2020 to US$100,205 million in 2024, an approximate 14.7% decrease. This indicates a reduction in the underlying asset base over the five-year period, with adjusted assets declining at a somewhat faster rate than reported assets.

Return on Assets (ROA)

Both reported and adjusted ROA exhibit a similar pattern over the period, with an initial substantial increase from 2020 to 2022, followed by a marked decrease thereafter. Reported ROA rose sharply from 3.07% in 2020 to a peak of 8.53% in 2022. Subsequently, it declined to 3.17% by 2024. Adjusted ROA showed an even more pronounced increase, moving from 3.93% in 2020 to 11.1% in 2022, before falling to 4.27% in 2024. This suggests that the company experienced a period of improving asset profitability particularly up to 2022, but faced challenges in sustaining these returns in the subsequent two years.

Comparison Between Reported and Adjusted Metrics

Adjusted measures, which remove the impact of goodwill, consistently show lower total assets but higher returns on assets across the years relative to reported figures. This implies that goodwill may be inflating asset values and reducing apparent profitability metrics when included. The more pronounced volatility in adjusted ROA compared to reported ROA further indicates that core operational profitability excluding intangible assets experienced stronger swings.

Overall Insights

The trends highlight a contraction in the asset base accompanied by fluctuating returns on asset investment. The peak performance period around 2021-2022 suggests favorable operational conditions or strategic initiatives enhancing efficiency, which were not maintained through 2023 and 2024. The larger decrease in adjusted asset values and the sharper decline in adjusted ROA after 2022 merit further investigation into the composition of assets and operational challenges faced.