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

Colgate-Palmolive Co. (NYSE:CL)

Analysis of Income Taxes

Advanced level


Income Tax Expense (Benefit)

Colgate-Palmolive Co., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Current tax provision 755  853  1,205  1,081  1,334 
Deferred tax provision (benefit) 19  53  108  71  (119)
Provision for income taxes 774  906  1,313  1,152  1,215 

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-18).

Item Description The company
Current tax provision Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Colgate-Palmolive Co.’s current tax provision decreased from 2017 to 2018 and from 2018 to 2019.
Deferred tax provision (benefit) Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Colgate-Palmolive Co.’s deferred tax provision (benefit) decreased from 2017 to 2018 and from 2018 to 2019.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Colgate-Palmolive Co.’s provision for income taxes decreased from 2017 to 2018 and from 2018 to 2019.

Effective Income Tax Rate (EITR)

Colgate-Palmolive Co., effective income tax rate (EITR) reconciliation

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Tax at United States statutory rate 21.00% 21.00% 35.00% 35.00% 35.00%
State income taxes, net of federal benefit 0.60% 1.00% 0.50% 0.50% 1.00%
Earnings taxed at other than United States statutory rate 4.70% 5.60% -3.40% -2.70% -3.60%
Excess tax benefits from stock-based compensation -0.20% -0.30% -1.40% 0.00% 0.00%
Foreign Tax Credit Carryback 0.00% -1.70% 0.00% 0.00% 0.00%
Charge (benefit) for foreign tax matters -0.90% -0.40% 0.00% -0.80% 0.50%
Foreign-derived intangible income benefit -1.30% -1.10% 0.00% 0.00% 0.00%
Benefit from Venezuela remeasurement 0.00% 0.00% 0.00% -5.60% 0.00%
Tax charge on incremental repatriation of foreign earnings 0.00% 0.00% 0.00% 5.60% 0.00%
Venezuela deconsolidation 0.00% 0.00% 0.00% 0.00% 12.80%
Other, net -0.50% -0.20% -0.90% -1.20% -1.70%
Effective tax rate, before charge for U.S. tax reform 23.40% 23.90% 29.80% 30.80% 44.00%
Charge for U.S. tax reform 0.00% 2.30% 7.90% 0.00% 0.00%
Effective tax rate 23.40% 26.20% 37.70% 30.80% 44.00%

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-18).

Item Description The company
Effective tax rate, before charge for U.S. tax reform Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Colgate-Palmolive Co.’s effective tax rate, before charge for U.S. tax reform decreased from 2017 to 2018 and from 2018 to 2019.

Components of Deferred Tax Assets and Liabilities

Colgate-Palmolive Co., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Pension and other retiree benefits 381  354  375  599  541 
Tax credits and tax loss carryforwards 93  89  48  34  30 
Accrued liabilities 221  180  197  246  235 
Stock-based compensation 88  95  90  127  123 
Other 100  164  82  82  151 
Deferred tax assets 883  882  792  1,088  1,080 
Valuation allowance (59) (54) (9) —  — 
Net deferred tax assets 824  828  783  1,088  1,080 
Goodwill and intangible assets (598) (344) (311) (451) (458)
Property, plant and equipment (303) (311) (306) (380) (380)
Deferred withholding tax (207) (181) (119) —  — 
Other (46) (75) (63) (202) (150)
Deferred tax liabilities (1,154) (911) (799) (1,033) (988)
Net deferred income taxes (330) (83) (16) 55  92 

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-18).

Item Description The company
Deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Colgate-Palmolive Co.’s deferred tax assets increased from 2017 to 2018 and from 2018 to 2019.
Net deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Colgate-Palmolive Co.’s net deferred tax assets increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.
Net deferred income taxes Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Colgate-Palmolive Co.’s net deferred income taxes decreased from 2017 to 2018 and from 2018 to 2019.

Deferred Tax Assets and Liabilities, Classification

Colgate-Palmolive Co., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Current deferred tax assets (included in Other current assets) —  —  —  —  258 
Noncurrent deferred tax assets 177  152  188  301  67 
Noncurrent deferred tax liabilities 507  235  204  246  233 

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-18).

Item Description The company
Noncurrent deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Colgate-Palmolive Co.’s noncurrent deferred tax assets decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.
Noncurrent deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Colgate-Palmolive Co.’s noncurrent deferred tax liabilities increased from 2017 to 2018 and from 2018 to 2019.

Adjustments to Financial Statements: Removal of Deferred Taxes

Colgate-Palmolive Co., 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 Current Assets
Current assets (as reported) 4,179  3,793  4,639  4,338  4,384 
Less: Current deferred tax assets, net —  —  —  —  258 
Current assets (adjusted) 4,179  3,793  4,639  4,338  4,126 
Adjustment to Total Assets
Total assets (as reported) 15,034  12,161  12,676  12,123  11,958 
Less: Current deferred tax assets, net —  —  —  —  258 
Less: Noncurrent deferred tax assets, net 177  152  188  301  67 
Total assets (adjusted) 14,857  12,009  12,488  11,822  11,633 
Adjustment to Total Liabilities
Total liabilities (as reported) 14,476  11,964  12,433  12,106  12,002 
Less: Noncurrent deferred tax liabilities, net 507  235  204  246  233 
Total liabilities (adjusted) 13,969  11,729  12,229  11,860  11,769 
Adjustment to Total Colgate-Palmolive Company Shareholders’ Equity
Total Colgate-Palmolive Company shareholders’ equity (as reported) 117  (102) (60) (243) (299)
Less: Net deferred tax assets (liabilities) (330) (83) (16) 55  92 
Total Colgate-Palmolive Company shareholders’ equity (adjusted) 447  (19) (44) (298) (391)
Adjustment to Net Income Attributable To Colgate-Palmolive Company
Net income attributable to Colgate-Palmolive Company (as reported) 2,367  2,400  2,024  2,441  1,384 
Add: Deferred income tax expense (benefit) 19  53  108  71  (119)
Net income attributable to Colgate-Palmolive Company (adjusted) 2,386  2,453  2,132  2,512  1,265 

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-18).


Colgate-Palmolive Co., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Colgate-Palmolive Co., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Current Ratio
Reported current ratio 1.03 1.14 1.36 1.31 1.24
Adjusted current ratio 1.03 1.14 1.36 1.31 1.17
Net Profit Margin
Reported net profit margin 15.08% 15.44% 13.10% 16.06% 8.63%
Adjusted net profit margin 15.20% 15.78% 13.80% 16.53% 7.89%
Total Asset Turnover
Reported total asset turnover 1.04 1.28 1.22 1.25 1.34
Adjusted total asset turnover 1.06 1.29 1.24 1.29 1.38
Financial Leverage
Reported financial leverage 128.50
Adjusted financial leverage 33.24
Return on Equity (ROE)
Reported ROE 2,023.08%
Adjusted ROE 533.78%
Return on Assets (ROA)
Reported ROA 15.74% 19.74% 15.97% 20.14% 11.57%
Adjusted ROA 16.06% 20.43% 17.07% 21.25% 10.87%

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-18).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Colgate-Palmolive Co.’s adjusted current ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Colgate-Palmolive Co.’s adjusted net profit margin ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Colgate-Palmolive Co.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then deteriorated significantly 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.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Colgate-Palmolive Co.’s adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Colgate-Palmolive Co., Financial Ratios: Reported vs. Adjusted


Adjusted Current Ratio

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)
Current assets 4,179  3,793  4,639  4,338  4,384 
Current liabilities 4,038  3,341  3,408  3,305  3,534 
Liquidity Ratio
Current ratio1 1.03 1.14 1.36 1.31 1.24
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted current assets 4,179  3,793  4,639  4,338  4,126 
Current liabilities 4,038  3,341  3,408  3,305  3,534 
Liquidity Ratio
Adjusted current ratio2 1.03 1.14 1.36 1.31 1.17

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-18).

2019 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 4,179 ÷ 4,038 = 1.03

2 Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= 4,179 ÷ 4,038 = 1.03

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Colgate-Palmolive Co.’s adjusted current ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Adjusted Net Profit Margin

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 income attributable to Colgate-Palmolive Company 2,367  2,400  2,024  2,441  1,384 
Net sales 15,693  15,544  15,454  15,195  16,034 
Profitability Ratio
Net profit margin1 15.08% 15.44% 13.10% 16.06% 8.63%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Colgate-Palmolive Company 2,386  2,453  2,132  2,512  1,265 
Net sales 15,693  15,544  15,454  15,195  16,034 
Profitability Ratio
Adjusted net profit margin2 15.20% 15.78% 13.80% 16.53% 7.89%

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-18).

2019 Calculations

1 Net profit margin = 100 × Net income attributable to Colgate-Palmolive Company ÷ Net sales
= 100 × 2,367 ÷ 15,693 = 15.08%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Colgate-Palmolive Company ÷ Net sales
= 100 × 2,386 ÷ 15,693 = 15.20%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Colgate-Palmolive Co.’s adjusted net profit margin ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

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 15,693  15,544  15,454  15,195  16,034 
Total assets 15,034  12,161  12,676  12,123  11,958 
Activity Ratio
Total asset turnover1 1.04 1.28 1.22 1.25 1.34
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales 15,693  15,544  15,454  15,195  16,034 
Adjusted total assets 14,857  12,009  12,488  11,822  11,633 
Activity Ratio
Adjusted total asset turnover2 1.06 1.29 1.24 1.29 1.38

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-18).

2019 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 15,693 ÷ 15,034 = 1.04

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 15,693 ÷ 14,857 = 1.06

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Colgate-Palmolive Co.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then deteriorated significantly 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 15,034  12,161  12,676  12,123  11,958 
Total Colgate-Palmolive Company shareholders’ equity 117  (102) (60) (243) (299)
Solvency Ratio
Financial leverage1 128.50
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 14,857  12,009  12,488  11,822  11,633 
Adjusted total Colgate-Palmolive Company shareholders’ equity 447  (19) (44) (298) (391)
Solvency Ratio
Adjusted financial leverage2 33.24

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-18).

2019 Calculations

1 Financial leverage = Total assets ÷ Total Colgate-Palmolive Company shareholders’ equity
= 15,034 ÷ 117 = 128.50

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Colgate-Palmolive Company shareholders’ equity
= 14,857 ÷ 447 = 33.24

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.

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 income attributable to Colgate-Palmolive Company 2,367  2,400  2,024  2,441  1,384 
Total Colgate-Palmolive Company shareholders’ equity 117  (102) (60) (243) (299)
Profitability Ratio
ROE1 2,023.08%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Colgate-Palmolive Company 2,386  2,453  2,132  2,512  1,265 
Adjusted total Colgate-Palmolive Company shareholders’ equity 447  (19) (44) (298) (391)
Profitability Ratio
Adjusted ROE2 533.78%

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-18).

2019 Calculations

1 ROE = 100 × Net income attributable to Colgate-Palmolive Company ÷ Total Colgate-Palmolive Company shareholders’ equity
= 100 × 2,367 ÷ 117 = 2,023.08%

2 Adjusted ROE = 100 × Adjusted net income attributable to Colgate-Palmolive Company ÷ Adjusted total Colgate-Palmolive Company shareholders’ equity
= 100 × 2,386 ÷ 447 = 533.78%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.

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 income attributable to Colgate-Palmolive Company 2,367  2,400  2,024  2,441  1,384 
Total assets 15,034  12,161  12,676  12,123  11,958 
Profitability Ratio
ROA1 15.74% 19.74% 15.97% 20.14% 11.57%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Colgate-Palmolive Company 2,386  2,453  2,132  2,512  1,265 
Adjusted total assets 14,857  12,009  12,488  11,822  11,633 
Profitability Ratio
Adjusted ROA2 16.06% 20.43% 17.07% 21.25% 10.87%

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-18).

2019 Calculations

1 ROA = 100 × Net income attributable to Colgate-Palmolive Company ÷ Total assets
= 100 × 2,367 ÷ 15,034 = 15.74%

2 Adjusted ROA = 100 × Adjusted net income attributable to Colgate-Palmolive Company ÷ Adjusted total assets
= 100 × 2,386 ÷ 14,857 = 16.06%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Colgate-Palmolive Co.’s adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.