Stock Analysis on Net

FedEx Corp. (NYSE:FDX)

Analysis of Goodwill and Intangible Assets

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Goodwill and Intangible Asset Disclosure

FedEx Corp., balance sheet: goodwill and intangible assets

US$ in millions

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May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Goodwill 6,992  6,372  6,884  6,973  7,154  6,747 
Customer relationships 591  641  685  676  656  912 
Technology 65  65  66  68  54  123 
Trademarks and other 132  137  141  136  202 
Other intangible assets, gross carrying amount 657  838  888  885  846  1,237 
Accumulated amortization (335) (516) (472) (405) (317) (229)
Other intangible assets, net book value 322  322  416  480  529  1,008 
Goodwill and other intangible assets 7,314  6,694  7,300  7,453  7,683  7,755 

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).

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. goodwill decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.
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.
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. goodwill and other intangible assets decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Adjustments to Financial Statements: Removal of Goodwill

FedEx Corp., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Adjustment to Total Assets
Total assets (as reported) 82,777  73,537  54,403  52,330  48,552  46,064 
Less: Goodwill 6,992  6,372  6,884  6,973  7,154  6,747 
Total assets (adjusted) 75,785  67,165  47,519  45,357  41,398  39,317 
Adjustment to Common Stockholders’ Investment
Common stockholders’ investment (as reported) 24,168  18,295  17,757  19,416  16,073  13,784 
Less: Goodwill 6,992  6,372  6,884  6,973  7,154  6,747 
Common stockholders’ investment (adjusted) 17,176  11,923  10,873  12,443  8,919  7,037 
Adjustment to Net Income
Net income (as reported) 5,231  1,286  540  4,572  2,997  1,820 
Add: Goodwill impairment charges —  358  —  374  —  — 
Net income (adjusted) 5,231  1,644  540  4,946  2,997  1,820 

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).


FedEx Corp., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Goodwill (Summary)

FedEx Corp., adjusted financial ratios

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May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Net Profit Margin
Reported net profit margin 6.23% 1.86% 0.77% 6.99% 4.97% 3.61%
Adjusted net profit margin 6.23% 2.38% 0.77% 7.56% 4.97% 3.61%
Total Asset Turnover
Reported total asset turnover 1.01 0.94 1.28 1.25 1.24 1.09
Adjusted total asset turnover 1.11 1.03 1.47 1.44 1.46 1.28
Financial Leverage
Reported financial leverage 3.43 4.02 3.06 2.70 3.02 3.34
Adjusted financial leverage 4.41 5.63 4.37 3.65 4.64 5.59
Return on Equity (ROE)
Reported ROE 21.64% 7.03% 3.04% 23.55% 18.65% 13.20%
Adjusted ROE 30.46% 13.79% 4.97% 39.75% 33.60% 25.86%
Return on Assets (ROA)
Reported ROA 6.32% 1.75% 0.99% 8.74% 6.17% 3.95%
Adjusted ROA 6.90% 2.45% 1.14% 10.90% 7.24% 4.63%

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. FedEx Corp. adjusted net profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. FedEx Corp. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.
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. adjusted financial leverage ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. FedEx Corp. adjusted ROE improved from 2019 to 2020 and from 2020 to 2021.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. FedEx Corp. adjusted ROA improved from 2019 to 2020 and from 2020 to 2021.

FedEx Corp., Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

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May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income 5,231  1,286  540  4,572  2,997  1,820 
Revenue 83,959  69,217  69,693  65,450  60,319  50,365 
Profitability Ratio
Net profit margin1 6.23% 1.86% 0.77% 6.99% 4.97% 3.61%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income 5,231  1,644  540  4,946  2,997  1,820 
Revenue 83,959  69,217  69,693  65,450  60,319  50,365 
Profitability Ratio
Adjusted net profit margin2 6.23% 2.38% 0.77% 7.56% 4.97% 3.61%

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).

2021 Calculations

1 Net profit margin = 100 × Net income ÷ Revenue
= 100 × 5,231 ÷ 83,959 = 6.23%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × 5,231 ÷ 83,959 = 6.23%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. FedEx Corp. adjusted net profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Revenue 83,959  69,217  69,693  65,450  60,319  50,365 
Total assets 82,777  73,537  54,403  52,330  48,552  46,064 
Activity Ratio
Total asset turnover1 1.01 0.94 1.28 1.25 1.24 1.09
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenue 83,959  69,217  69,693  65,450  60,319  50,365 
Adjusted total assets 75,785  67,165  47,519  45,357  41,398  39,317 
Activity Ratio
Adjusted total asset turnover2 1.11 1.03 1.47 1.44 1.46 1.28

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).

2021 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= 83,959 ÷ 82,777 = 1.01

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 83,959 ÷ 75,785 = 1.11

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. FedEx Corp. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then slightly improved from 2020 to 2021.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Total assets 82,777  73,537  54,403  52,330  48,552  46,064 
Common stockholders’ investment 24,168  18,295  17,757  19,416  16,073  13,784 
Solvency Ratio
Financial leverage1 3.43 4.02 3.06 2.70 3.02 3.34
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 75,785  67,165  47,519  45,357  41,398  39,317 
Adjusted common stockholders’ investment 17,176  11,923  10,873  12,443  8,919  7,037 
Solvency Ratio
Adjusted financial leverage2 4.41 5.63 4.37 3.65 4.64 5.59

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).

2021 Calculations

1 Financial leverage = Total assets ÷ Common stockholders’ investment
= 82,777 ÷ 24,168 = 3.43

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted common stockholders’ investment
= 75,785 ÷ 17,176 = 4.41

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. adjusted financial leverage ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income 5,231  1,286  540  4,572  2,997  1,820 
Common stockholders’ investment 24,168  18,295  17,757  19,416  16,073  13,784 
Profitability Ratio
ROE1 21.64% 7.03% 3.04% 23.55% 18.65% 13.20%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income 5,231  1,644  540  4,946  2,997  1,820 
Adjusted common stockholders’ investment 17,176  11,923  10,873  12,443  8,919  7,037 
Profitability Ratio
Adjusted ROE2 30.46% 13.79% 4.97% 39.75% 33.60% 25.86%

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).

2021 Calculations

1 ROE = 100 × Net income ÷ Common stockholders’ investment
= 100 × 5,231 ÷ 24,168 = 21.64%

2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted common stockholders’ investment
= 100 × 5,231 ÷ 17,176 = 30.46%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. FedEx Corp. adjusted ROE improved from 2019 to 2020 and from 2020 to 2021.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income 5,231  1,286  540  4,572  2,997  1,820 
Total assets 82,777  73,537  54,403  52,330  48,552  46,064 
Profitability Ratio
ROA1 6.32% 1.75% 0.99% 8.74% 6.17% 3.95%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income 5,231  1,644  540  4,946  2,997  1,820 
Adjusted total assets 75,785  67,165  47,519  45,357  41,398  39,317 
Profitability Ratio
Adjusted ROA2 6.90% 2.45% 1.14% 10.90% 7.24% 4.63%

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).

2021 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 5,231 ÷ 82,777 = 6.32%

2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 5,231 ÷ 75,785 = 6.90%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. FedEx Corp. adjusted ROA improved from 2019 to 2020 and from 2020 to 2021.