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

Abbott Laboratories (NYSE:ABT)

Analysis of Goodwill and Intangible Assets

Advanced level

Adjustments to Financial Statements: Removal of Goodwill

Abbott Laboratories, adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Adjustment to Total Assets
Total assets (as reported) 67,887  67,173  76,250  52,666  41,247 
Less: Goodwill 23,195  23,254  24,020  7,683  9,638 
Total assets (adjusted) 44,692  43,919  52,230  44,983  31,609 
Adjustment to Total Abbott Shareholders’ Investment
Total Abbott shareholders’ investment (as reported) 31,088  30,524  30,897  20,538  21,211 
Less: Goodwill 23,195  23,254  24,020  7,683  9,638 
Total Abbott shareholders’ investment (adjusted) 7,893  7,270  6,877  12,855  11,573 

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19).


Abbott Laboratories, Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Goodwill (Summary)

Abbott Laboratories, adjusted financial ratios

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Total Asset Turnover
Reported total asset turnover 0.47 0.46 0.36 0.40 0.49
Adjusted total asset turnover 0.71 0.70 0.52 0.46 0.65
Financial Leverage
Reported financial leverage 2.18 2.20 2.47 2.56 1.94
Adjusted financial leverage 5.66 6.04 7.59 3.50 2.73
Return on Equity (ROE)
Reported ROE 11.86% 7.76% 1.54% 6.82% 20.85%
Adjusted ROE 46.71% 32.57% 6.94% 10.89% 38.22%
Return on Assets (ROA)
Reported ROA 5.43% 3.53% 0.63% 2.66% 10.72%
Adjusted ROA 8.25% 5.39% 0.91% 3.11% 13.99%

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Abbott Laboratories’s 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.
Abbott Laboratories’s adjusted financial leverage ratio decreased from 2017 to 2018 and from 2018 to 2019.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Abbott Laboratories’s 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. Abbott Laboratories’s adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.

Abbott Laboratories, Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net sales 31,904  30,578  27,390  20,853  20,405 
Total assets 67,887  67,173  76,250  52,666  41,247 
Activity Ratio
Total asset turnover1 0.47 0.46 0.36 0.40 0.49
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net sales 31,904  30,578  27,390  20,853  20,405 
Adjusted total assets 44,692  43,919  52,230  44,983  31,609 
Activity Ratio
Adjusted total asset turnover2 0.71 0.70 0.52 0.46 0.65

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19).

2019 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 31,904 ÷ 67,887 = 0.47

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 31,904 ÷ 44,692 = 0.71

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Abbott Laboratories’s adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total assets 67,887  67,173  76,250  52,666  41,247 
Total Abbott shareholders’ investment 31,088  30,524  30,897  20,538  21,211 
Solvency Ratio
Financial leverage1 2.18 2.20 2.47 2.56 1.94
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 44,692  43,919  52,230  44,983  31,609 
Adjusted total Abbott shareholders’ investment 7,893  7,270  6,877  12,855  11,573 
Solvency Ratio
Adjusted financial leverage2 5.66 6.04 7.59 3.50 2.73

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19).

2019 Calculations

1 Financial leverage = Total assets ÷ Total Abbott shareholders’ investment
= 67,887 ÷ 31,088 = 2.18

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Abbott shareholders’ investment
= 44,692 ÷ 7,893 = 5.66

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.
Abbott Laboratories’s adjusted financial leverage ratio decreased from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net earnings 3,687  2,368  477  1,400  4,423 
Total Abbott shareholders’ investment 31,088  30,524  30,897  20,538  21,211 
Profitability Ratio
ROE1 11.86% 7.76% 1.54% 6.82% 20.85%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings 3,687  2,368  477  1,400  4,423 
Adjusted total Abbott shareholders’ investment 7,893  7,270  6,877  12,855  11,573 
Profitability Ratio
Adjusted ROE2 46.71% 32.57% 6.94% 10.89% 38.22%

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19).

2019 Calculations

1 ROE = 100 × Net earnings ÷ Total Abbott shareholders’ investment
= 100 × 3,687 ÷ 31,088 = 11.86%

2 Adjusted ROE = 100 × Net earnings ÷ Adjusted total Abbott shareholders’ investment
= 100 × 3,687 ÷ 7,893 = 46.71%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Abbott Laboratories’s adjusted ROE improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net earnings 3,687  2,368  477  1,400  4,423 
Total assets 67,887  67,173  76,250  52,666  41,247 
Profitability Ratio
ROA1 5.43% 3.53% 0.63% 2.66% 10.72%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings 3,687  2,368  477  1,400  4,423 
Adjusted total assets 44,692  43,919  52,230  44,983  31,609 
Profitability Ratio
Adjusted ROA2 8.25% 5.39% 0.91% 3.11% 13.99%

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19).

2019 Calculations

1 ROA = 100 × Net earnings ÷ Total assets
= 100 × 3,687 ÷ 67,887 = 5.43%

2 Adjusted ROA = 100 × Net earnings ÷ Adjusted total assets
= 100 × 3,687 ÷ 44,692 = 8.25%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Abbott Laboratories’s adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.