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

FedEx Corp. (NYSE:FDX)

Analysis of Goodwill and Intangible Assets

Advanced level

Goodwill and Intangible Asset Disclosure

FedEx Corp., balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel LibreOffice Calc
May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015
Goodwill 6,372  6,884  6,973  7,154  6,747  3,810 
Customer relationships 641  685  676  656  912  338 
Technology 65  66  68  54  123  34 
Trademarks and other 132  137  141  136  202  60 
Other intangible assets, gross carrying amount 838  888  885  846  1,237  432 
Accumulated amortization (516) (472) (405) (317) (229) (225)
Other intangible assets, net book value 322  416  480  529  1,008  207 
Goodwill and other intangible assets 6,694  7,300  7,453  7,683  7,755  4,017 

Based on: 10-K (filing date: 2020-07-20), 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14).

Item Description The company
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. FedEx Corp.’s goodwill decreased from 2018 to 2019 and from 2019 to 2020.
Other intangible assets, net book value Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. FedEx Corp.’s other intangible assets, net book value decreased from 2018 to 2019 and from 2019 to 2020.
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. FedEx Corp.’s goodwill and other intangible assets decreased from 2018 to 2019 and from 2019 to 2020.

Adjustments to Financial Statements: Removal of Goodwill

FedEx Corp., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015
Adjustment to Total Assets
Total assets (as reported) 73,537  54,403  52,330  48,552  46,064  37,069 
Less: Goodwill 6,372  6,884  6,973  7,154  6,747  3,810 
Total assets (adjusted) 67,165  47,519  45,357  41,398  39,317  33,259 
Adjustment to Common Stockholders’ Investment
Common stockholders’ investment (as reported) 18,295  17,757  19,416  16,073  13,784  14,993 
Less: Goodwill 6,372  6,884  6,973  7,154  6,747  3,810 
Common stockholders’ investment (adjusted) 11,923  10,873  12,443  8,919  7,037  11,183 
Adjustment to Net Income
Net income (as reported) 1,286  540  4,572  2,997  1,820  1,050 
Add: Goodwill impairment charges 358  —  374  —  —  — 
Net income (adjusted) 1,644  540  4,946  2,997  1,820  1,050 

Based on: 10-K (filing date: 2020-07-20), 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14).

FedEx Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

FedEx Corp., adjusted financial ratios

Microsoft Excel LibreOffice Calc
May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015
Net Profit Margin
Reported net profit margin 1.86% 0.77% 6.99% 4.97% 3.61% 2.21%
Adjusted net profit margin 2.38% 0.77% 7.56% 4.97% 3.61% 2.21%
Total Asset Turnover
Reported total asset turnover 0.94 1.28 1.25 1.24 1.09 1.28
Adjusted total asset turnover 1.03 1.47 1.44 1.46 1.28 1.43
Financial Leverage
Reported financial leverage 4.02 3.06 2.70 3.02 3.34 2.47
Adjusted financial leverage 5.63 4.37 3.65 4.64 5.59 2.97
Return on Equity (ROE)
Reported ROE 7.03% 3.04% 23.55% 18.65% 13.20% 7.00%
Adjusted ROE 13.79% 4.97% 39.75% 33.60% 25.86% 9.39%
Return on Assets (ROA)
Reported ROA 1.75% 0.99% 8.74% 6.17% 3.95% 2.83%
Adjusted ROA 2.45% 1.14% 10.90% 7.24% 4.63% 3.16%

Based on: 10-K (filing date: 2020-07-20), 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. FedEx Corp.’s adjusted net profit margin ratio deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. FedEx Corp.’s adjusted total asset turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
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.		 FedEx Corp.’s adjusted financial leverage ratio increased from 2018 to 2019 and from 2019 to 2020.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. FedEx Corp.’s adjusted ROE deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. FedEx Corp.’s adjusted ROA deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.

FedEx Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income 1,286  540  4,572  2,997  1,820  1,050 
Revenue 69,217  69,693  65,450  60,319  50,365  47,453 
Profitability Ratio
Net profit margin1 1.86% 0.77% 6.99% 4.97% 3.61% 2.21%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income 1,644  540  4,946  2,997  1,820  1,050 
Revenue 69,217  69,693  65,450  60,319  50,365  47,453 
Profitability Ratio
Adjusted net profit margin2 2.38% 0.77% 7.56% 4.97% 3.61% 2.21%

Based on: 10-K (filing date: 2020-07-20), 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14).

2020 Calculations

1 Net profit margin = 100 × Net income ÷ Revenue
= 100 × 1,286 ÷ 69,217 = 1.86%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × 1,644 ÷ 69,217 = 2.38%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. FedEx Corp.’s adjusted net profit margin ratio deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Revenue 69,217  69,693  65,450  60,319  50,365  47,453 
Total assets 73,537  54,403  52,330  48,552  46,064  37,069 
Activity Ratio
Total asset turnover1 0.94 1.28 1.25 1.24 1.09 1.28
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenue 69,217  69,693  65,450  60,319  50,365  47,453 
Adjusted total assets 67,165  47,519  45,357  41,398  39,317  33,259 
Activity Ratio
Adjusted total asset turnover2 1.03 1.47 1.44 1.46 1.28 1.43

Based on: 10-K (filing date: 2020-07-20), 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14).

2020 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= 69,217 ÷ 73,537 = 0.94

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 69,217 ÷ 67,165 = 1.03

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. FedEx Corp.’s adjusted total asset turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total assets 73,537  54,403  52,330  48,552  46,064  37,069 
Common stockholders’ investment 18,295  17,757  19,416  16,073  13,784  14,993 
Solvency Ratio
Financial leverage1 4.02 3.06 2.70 3.02 3.34 2.47
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 67,165  47,519  45,357  41,398  39,317  33,259 
Adjusted common stockholders’ investment 11,923  10,873  12,443  8,919  7,037  11,183 
Solvency Ratio
Adjusted financial leverage2 5.63 4.37 3.65 4.64 5.59 2.97

Based on: 10-K (filing date: 2020-07-20), 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14).

2020 Calculations

1 Financial leverage = Total assets ÷ Common stockholders’ investment
= 73,537 ÷ 18,295 = 4.02

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted common stockholders’ investment
= 67,165 ÷ 11,923 = 5.63

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.		 FedEx Corp.’s adjusted financial leverage ratio increased from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income 1,286  540  4,572  2,997  1,820  1,050 
Common stockholders’ investment 18,295  17,757  19,416  16,073  13,784  14,993 
Profitability Ratio
ROE1 7.03% 3.04% 23.55% 18.65% 13.20% 7.00%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income 1,644  540  4,946  2,997  1,820  1,050 
Adjusted common stockholders’ investment 11,923  10,873  12,443  8,919  7,037  11,183 
Profitability Ratio
Adjusted ROE2 13.79% 4.97% 39.75% 33.60% 25.86% 9.39%

Based on: 10-K (filing date: 2020-07-20), 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14).

2020 Calculations

1 ROE = 100 × Net income ÷ Common stockholders’ investment
= 100 × 1,286 ÷ 18,295 = 7.03%

2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted common stockholders’ investment
= 100 × 1,644 ÷ 11,923 = 13.79%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. FedEx Corp.’s adjusted ROE deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income 1,286  540  4,572  2,997  1,820  1,050 
Total assets 73,537  54,403  52,330  48,552  46,064  37,069 
Profitability Ratio
ROA1 1.75% 0.99% 8.74% 6.17% 3.95% 2.83%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income 1,644  540  4,946  2,997  1,820  1,050 
Adjusted total assets 67,165  47,519  45,357  41,398  39,317  33,259 
Profitability Ratio
Adjusted ROA2 2.45% 1.14% 10.90% 7.24% 4.63% 3.16%

Based on: 10-K (filing date: 2020-07-20), 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14).

2020 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 1,286 ÷ 73,537 = 1.75%

2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 1,644 ÷ 67,165 = 2.45%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. FedEx Corp.’s adjusted ROA deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.