Colgate-Palmolive Co. (NYSE:CL)

The financial data reveals several notable trends in the intangible assets over the five-year period ending in 2022. Goodwill, after a significant increase from 2530 million to a peak of 3824 million by the end of 2020, declined in the subsequent two years, reaching 3352 million in 2022. This pattern suggests some adjustments or impairments following a period of acquisition or revaluation.

Trademarks remained relatively stable throughout the period, fluctuating slightly but staying close to the 770-900 million range. This stability indicates consistent valuation and possibly limited new trademark-related investments or disposals.

The "Other" intangible assets category experienced a notable increase from 390 million in 2018 to 786 million in 2020, followed by a gradual reduction to 616 million by the end of 2022. This could reflect initial capitalizations or acquisitions, subsequently adjusted by disposals or amortization.

The finite life intangible assets, observed through gross carrying amounts, show an upward trend until 2020, growing from 1161 million to 1688 million. However, from 2021 onwards, the amounts declined to 1501 million by 2022. Concurrently, accumulated amortization steadily increased from -491 million to -793 million, indicating ongoing periodic amortization efforts. Net finite life intangible assets rose until 2020 but fell sharply after, declining from 1029 million to 708 million in 2022, highlighting intensified amortization or asset disposals in recent years.

Indefinite life intangible assets exhibited an increasing trend until 2020, peaking at 1865 million, followed by a steady decline to 1212 million by 2022. This decrease may reflect impairment losses or reclassifications.

When aggregating goodwill and other intangible assets, the total peaked significantly at 6718 million in 2020 but then declined to 5272 million by 2022. This overall trajectory points to consolidation in intangible assets and potential asset write-downs after a growth phase.

Overall, the data shows an initial period of growth in intangible assets, particularly between 2018 and 2020, followed by a period marked by asset reduction, increased amortization, and possible impairments from 2021 through 2022. These trends suggest the company experienced strategic acquisitions or revaluations earlier, followed by a phase of asset optimization and rationalization.

Goodwill

Increased markedly until 2020, then declined through 2022.

Trademarks

Relatively stable with slight fluctuations across the years.

Other intangible assets

Significant growth until 2020, followed by gradual reduction.

Finite life intangible assets (gross and net)

Growth until 2020, then decline; accumulated amortization steadily increased, resulting in a net asset decrease.

Indefinite life intangible assets

Peaked in 2020, followed by continuous decline indicating potential impairments.

Total goodwill and other intangible assets

Reached highest point in 2020, then contracted substantially by 2022.

Total Assets

The reported total assets showed a consistent upward trend from 2018 to 2020, increasing significantly from 12,161 million USD to 15,920 million USD. However, a decline occurred in 2021, bringing assets down to 15,040 million USD, followed by a moderate recovery to 15,731 million USD in 2022. On an adjusted basis, total assets also rose steadily from 9,631 million USD in 2018 to a peak of 12,096 million USD in 2020, then decreased to 11,756 million USD in 2021 before climbing again to 12,379 million USD in 2022. The adjusted assets consistently remained below the reported figures, reflecting the impact of goodwill adjustments.

Shareholders' Equity

Reported shareholders' equity exhibited a positive trend from 2018 to 2020, moving from a negative balance of 102 million USD to a positive 743 million USD. Subsequently, equity declined in 2021 and 2022, ending at 401 million USD. In contrast, adjusted shareholders' equity was negative throughout the entire period, ranging from -2,632 million USD in 2018 to -3,391 million USD in 2019, with some improvement in 2020 and 2021 but a slight deterioration in 2022 to -2,951 million USD. This persistent negative adjusted equity suggests the presence of significant intangible assets or goodwill impairments affecting the net asset base.

Net Income

The reported net income attributable to the company experienced fluctuations, peaking at 2,695 million USD in 2020 followed by a decline to 2,166 million USD in 2021 and further down to 1,785 million USD in 2022. The adjusted net income mirrored the reported income closely through 2020 but diverged afterward, with adjustments leading to a less pronounced decline: from 2,695 million USD in 2020 to 2,533 million USD in 2021 and 2,117 million USD in 2022. The adjusted figures suggest that non-operating or one-time items influenced the reported earnings, softening the apparent downward trend in profitability.

Overall Insights

The data illustrates growth in asset base until 2020, followed by pressure and partial recovery in subsequent years. The discrepancy between reported and adjusted figures highlights the impact of goodwill and intangible asset adjustments on the financial position, specifically evident in shareholders' equity which remains negative after adjustments. While net income showed a peak in 2020, subsequent declines point to challenges in maintaining profitability, though adjusted income indicates that underlying earnings were somewhat more resilient than reported results imply. These patterns can inform considerations regarding asset quality, balance sheet strength, and earnings sustainability.

Net Profit Margin

The reported net profit margin showed a declining trend over the five-year period, starting at 15.44% in 2018 and decreasing steadily to 9.93% by 2022. The adjusted net profit margin, which accounts for goodwill adjustments, also declined but remained higher than the reported figures in the later years. It peaked at 16.36% in 2020 before decreasing to 11.78% in 2022, indicating some impact from adjustments on profitability measures.

Total Asset Turnover

The reported total asset turnover ratio demonstrated a downward trend from 1.28 in 2018 to 1.03 in 2020 but recovered slightly to 1.16 in 2021 and marginally declined again to 1.14 in 2022. The adjusted total asset turnover was consistently higher than the reported values, ranging from 1.61 in 2018 to 1.45 in 2022, suggesting that after adjusting for goodwill, asset utilization appears more efficient throughout the period.

Financial Leverage

Reported financial leverage data is partially incomplete, lacking values for 2018. The available data indicates an unusually high and inconsistent leverage ratio, with 128.5 in 2019, which drastically drops to 21.43 in 2020, then increases to 24.7 in 2021, and rises substantially again to 39.23 in 2022. The absence of adjusted financial leverage figures limits the ability to compare leverage trends accurately with goodwill considerations.

Return on Equity (ROE)

Reported ROE values display remarkable volatility and extremely high percentages starting from 2023.08% in 2019, decreasing to 362.72% in 2020, then slightly declining to 355.67% in 2021, before increasing sharply again to 445.14% in 2022. This erratic and inflated ROE suggests possible reporting anomalies or significant one-time events impacting equity returns. There are no adjusted ROE figures provided for comparison.

Return on Assets (ROA)

Reported ROA exhibits a decline over the years, from 19.74% in 2018 down to 11.35% in 2022, indicating decreasing efficiency in asset utilization to generate profits. The adjusted ROA, however, consistently exceeds the reported figures, ranging from 24.92% in 2018 to 17.1% in 2022, but also exhibits a declining trend. This suggests the goodwill adjustments provide a higher baseline for asset profitability, though operational efficiency appears to have weakened.

Net Income Trends

The reported net income attributable to the company showed a fluctuation over the five-year period. Starting at $2,400 million in 2018, it slightly declined to $2,367 million in 2019, then increased to $2,695 million in 2020. However, the subsequent years experienced a downward trend with a decrease to $2,166 million in 2021, followed by a further decline to $1,785 million in 2022.

The adjusted net income data presents a slightly different perspective, particularly for the years 2021 and 2022. While matching the reported figures from 2018 to 2020, the adjusted net income remained higher during 2021 and 2022, recorded at $2,533 million and $2,117 million respectively. This indicates adjustments that have positively impacted the net income figures by excluding certain items, which otherwise contributed to a sharper decline.

Net Profit Margin Trends

The reported net profit margin followed a declining trajectory throughout the period. From 15.44% in 2018, it showed a gradual drop to 15.08% in 2019, then increased to 16.36% in 2020, possibly reflecting better profitability in that year. Nevertheless, the margin then decreased significantly in 2021 to 12.43% and further fell to 9.93% in 2022, indicating reduced profitability relative to revenue.

The adjusted net profit margin data again reveals a less severe decline than the reported figures for the final two years. While matching reported margins from 2018 to 2020, adjusted margins were healthier at 14.54% in 2021 and 11.78% in 2022. This suggests adjustments to earnings improved the margin representation by removing the impact of specific non-recurring or unusual items.

Overall Insights

Over the five-year timeframe, there is a clear pattern of initial stability and improvement in earnings and profitability through 2020, followed by notable declines in 2021 and 2022. The divergence observed between reported and adjusted values in the latter years indicates that certain one-time or exceptional items significantly affected the company's reported financial performance.

Despite adjustments, the downward trend in net income and profit margins highlights challenges faced by the company in maintaining prior levels of profitability. The decrease in profitability ratios points toward either increased costs, pricing pressures, or other operational challenges that have diminished the company's efficiency in generating profits from revenues.

Total Assets

The reported total assets exhibit an overall upward trend from 12,161 million USD in 2018, peaking at 15,920 million USD in 2020, followed by a slight decline to 15,040 million USD in 2021, and a subsequent increase to 15,731 million USD in 2022. This pattern indicates some fluctuations but generally reflects growth in asset base over the five-year period.

The adjusted total assets, which exclude goodwill, follow a similar trend with a consistent increase from 9,631 million USD in 2018 to 12,096 million USD in 2020. Although there is a modest dip to 11,756 million USD in 2021, adjusted assets recover to 12,379 million USD in 2022. The adjustments imply that goodwill constitutes a significant portion of total assets but the underlying asset base also shows growth over time.

Total Asset Turnover

The reported total asset turnover ratio declines from 1.28 in 2018 to 1.04 in 2019 and stabilizes around 1.03 in 2020, suggesting reduced efficiency in generating revenue from asset base in the first years. Subsequently, there is an improvement with the ratio rising to 1.16 in 2021 and slightly dipping to 1.14 in 2022, indicating a recovery in asset utilization.

Adjusted total asset turnover ratios display a similar but generally higher trend, beginning at 1.61 in 2018 and decreasing steadily to 1.36 in 2019 and 2020. Afterwards, a positive recovery is seen with increases to 1.48 in 2021 and a slight fall to 1.45 in 2022. The higher adjusted turnover ratios compared to the reported ones suggest that when goodwill is excluded, the company’s asset efficiency appears stronger.

Insights

While total asset values have grown, the asset turnover ratios illustrate a dip in productivity per asset unit in the middle years, followed by improvement. The consistent advantage of adjusted metrics suggests that goodwill inflates total assets and that analyzing assets excluding goodwill provides a clearer picture of operational efficiency. Overall, asset management efficiency has improved post-2020, coinciding with stabilization and modest growth in the asset base.

The financial data reveals several notable trends over the five-year period.

Total assets

Reported total assets showed a generally increasing trend from US$12,161 million in 2018 to US$15,731 million in 2022, with a peak in 2020 at US$15,920 million followed by a slight decline in 2021 before recovering in 2022. The adjusted total assets also follow a similar upward pattern, rising from US$9,631 million in 2018 to US$12,379 million in 2022. This indicates steady asset growth when excluding goodwill adjustments.

Shareholders’ equity

The reported shareholders’ equity demonstrates a volatile pattern, moving from a small negative value (-US$102 million) in 2018 to a positive peak of US$743 million in 2020, then declining to US$401 million in 2022. The adjusted shareholders' equity shows consistent negativity throughout the period, ranging from -US$2,632 million in 2018 to -US$2,951 million in 2022, although the absolute value fluctuates. This persistent negative adjusted equity suggests potential impairments or goodwill write-downs impacting net asset values.

Financial leverage

Reported financial leverage data is largely missing except for 2019 through 2022, starting with an exceptionally high ratio of 128.5 in 2019, which declines sharply to around 21.43 in 2020, then gradually rises to 39.23 by 2022. The absence of adjusted financial leverage data limits deeper analysis, but the reported figures imply significant changes in the company's relative debt or equity structure between these years.

Overall, the data reflects growth in total assets, volatility in shareholders’ equity with a consistent negative adjusted equity position, and fluctuating financial leverage ratios. These dynamics suggest underlying adjustments, likely related to goodwill impairments, are materially influencing equity and leverage assessments. The improving asset base contrasts with challenges in maintaining positive adjusted equity, highlighting areas for further financial scrutiny.

The data reflects the financial performance and position of the company over a five-year span with a focus on net income, shareholders’ equity, and return on equity (ROE), both reported and adjusted for goodwill.

Net Income

Reported net income shows a general fluctuation, with a peak in 2020 at 2695 million US dollars, followed by a decline in subsequent years, reaching 1785 million in 2022. The adjusted net income follows a similar pattern but indicates higher values in 2021 and 2022, where it measures 2533 million and 2117 million respectively, suggesting adjustments have a positive impact on net income in those years.

Shareholders’ Equity

There is a stark contrast between reported and adjusted total shareholders’ equity. Reported shareholders’ equity is positive and relatively stable from 2019 onwards, fluctuating between 117 million in 2019 and 401 million in 2022, with a low negative value in 2018. In contrast, adjusted shareholders’ equity shows consistently large negative values throughout the years, from -2632 million in 2018 to -2951 million in 2022, indicating a significant impact from adjustments, presumably goodwill write-downs or related reclassifications.

Return on Equity (ROE)

Reported ROE figures show extreme volatility and unusually high values from 2019 onwards, ranging from 2023.08% to 445.14%. These abnormal peaks likely correlate with the low or negative reported shareholders’ equity base, which inflates the ROE metric. Adjusted ROE data are unavailable, making it impossible to compare or assess the performance based on adjusted equity.

Overall, the trends suggest that reported net income experienced variability with a peak in 2020 and a decrease thereafter, while adjustments improve net income figures in later years. The shareholders’ equity adjustments reveal significant differences from reported values, suggesting considerable goodwill or similar intangible asset adjustments. The reported ROE’s extreme values highlight the distortions caused by the low equity base, emphasizing the importance of considering adjusted figures for a more accurate assessment, although adjusted ROE data is missing.

The financial data reveals notable trends in both reported and adjusted figures over the five-year period. Net income attributable to the company exhibits fluctuations, with a peak in 2020 followed by a gradual decline through 2022. Specifically, reported net income rose from 2400 million USD in 2018 to 2695 million USD in 2020, then declined to 1785 million USD by 2022. Adjusted net income follows a similar pattern but shows higher values in the last two years, suggesting certain one-time or non-operational factors impacting the reported figures.

Total assets display an increasing trend, with reported total assets growing from 12,161 million USD in 2018 to 15,731 million USD in 2022. Adjusted total assets, which exclude goodwill adjustments, also rise but at a consistently lower level, increasing from 9,631 million USD to 12,379 million USD over the same period. This indicates that goodwill constitutes a significant portion of the company’s assets and that growth in total assets is partly attributable to intangible contributions.

Return on Assets (ROA) shows a clear declining trend throughout the years. Reported ROA decreases from 19.74% in 2018 to 11.35% in 2022, indicating decreasing profitability relative to the asset base. Adjusted ROA values are higher than reported ROA in every year, ranging from 24.92% in 2018 to 17.1% in 2022, but they also exhibit a downward trajectory. This pattern suggests that, after excluding goodwill effects, asset profitability has weakened, possibly due to lower net income levels or strategic shifts affecting asset utilization.

Overall, the analysis highlights a period marked by growth in asset base accompanied by a reduction in net income and diminishing efficiency in asset utilization as measured by ROA. The adjustments for goodwill provide a perspective that emphasizes stronger asset profitability than reported figures alone but confirm the trend of declining returns in recent years.