Stock Analysis on Net

GlaxoSmithKline PLC (NYSE:GSK)

This company has been moved to the archive! The financial data has not been updated since February 27, 2015.

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

GlaxoSmithKline PLC, income tax expense (benefit), continuing operations

US$ in millions, translated from GBP £

Microsoft Excel
12 months ended: Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Current taxation 1,253 2,567 2,774 3,241 2,189
Deferred taxation (1,022) (878) 394 239 (182)
Taxation 231 1,689 3,168 3,480 2,007

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

Item Description The company
Current taxation Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. GlaxoSmithKline PLC current taxation decreased from 2012 to 2013 and from 2013 to 2014.
Deferred taxation Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. GlaxoSmithKline PLC deferred taxation decreased from 2012 to 2013 and from 2013 to 2014.
Taxation Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. GlaxoSmithKline PLC taxation decreased from 2012 to 2013 and from 2013 to 2014.

Components of Deferred Tax Assets and Liabilities

GlaxoSmithKline PLC, components of deferred tax assets and liabilities

US$ in millions, translated from GBP £

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Deferred tax assets 4,540 3,454 3,879 4,427 3,950
Deferred tax liabilities (752) (1,148) (1,633) (1,277) (1,088)
Deferred tax assets (liabilities), net 3,788 2,305 2,246 3,149 2,861

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

Item Description The company
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. GlaxoSmithKline PLC deferred tax assets decreased from 2012 to 2013 but then increased from 2013 to 2014 exceeding 2012 level.
Deferred tax assets (liabilities), net Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. GlaxoSmithKline PLC deferred tax assets (liabilities), net increased from 2012 to 2013 and from 2013 to 2014.

Deferred Tax Assets and Liabilities, Classification

GlaxoSmithKline PLC, deferred tax assets and liabilities, classification

US$ in millions, translated from GBP £

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Deferred tax assets 4,540 3,454 3,879 4,427 3,950
Deferred tax liabilities 752 1,148 1,633 1,277 1,088

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

Item Description The company
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. GlaxoSmithKline PLC deferred tax assets decreased from 2012 to 2013 but then increased from 2013 to 2014 exceeding 2012 level.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. GlaxoSmithKline PLC deferred tax liabilities decreased from 2012 to 2013 and from 2013 to 2014.

Adjustments to Financial Statements: Removal of Deferred Taxes

GlaxoSmithKline PLC, adjustments to financial statements

US$ in millions, translated from GBP £

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Adjustment to Total Assets
Total assets (as reported) 68,656 69,748 67,450 63,828 64,999
Less: Noncurrent deferred tax assets, net 4,540 3,454 3,879 4,427 3,950
Total assets (adjusted) 64,116 66,294 63,571 59,402 61,050
Adjustment to Total Liabilities
Total liabilities (as reported) 60,319 56,801 56,477 50,113 50,000
Less: Noncurrent deferred tax liabilities, net 752 1,148 1,633 1,277 1,088
Total liabilities (adjusted) 59,568 55,653 54,845 48,836 48,912
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported) 7,200 11,596 9,449 12,480 13,679
Less: Net deferred tax assets (liabilities) 3,788 2,305 2,246 3,149 2,861
Shareholders’ equity (adjusted) 3,412 9,291 7,203 9,330 10,817
Adjustment to Profit Attributable To Shareholders
Profit attributable to shareholders (as reported) 4,655 9,009 7,424 8,174 2,515
Add: Deferred income tax expense (benefit) (1,022) (878) 394 239 (182)
Profit attributable to shareholders (adjusted) 3,633 8,131 7,818 8,414 2,333

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).


GlaxoSmithKline PLC, Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

GlaxoSmithKline PLC, adjusted financial ratios

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Net Profit Margin
Reported net profit margin 11.98% 20.51% 17.27% 19.21% 5.76%
Adjusted net profit margin 9.35% 18.51% 18.19% 19.77% 5.34%
Total Asset Turnover
Reported total asset turnover 0.57 0.63 0.64 0.67 0.67
Adjusted total asset turnover 0.61 0.66 0.68 0.72 0.72
Financial Leverage
Reported financial leverage 9.54 6.01 7.14 5.11 4.75
Adjusted financial leverage 18.79 7.14 8.83 6.37 5.64
Return on Equity (ROE)
Reported ROE 64.65% 77.69% 78.57% 65.50% 18.39%
Adjusted ROE 106.49% 87.51% 108.53% 90.17% 21.57%
Return on Assets (ROA)
Reported ROA 6.78% 12.92% 11.01% 12.81% 3.87%
Adjusted ROA 5.67% 12.26% 12.30% 14.16% 3.82%

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. GlaxoSmithKline PLC adjusted net profit margin ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. GlaxoSmithKline PLC adjusted total asset turnover ratio deteriorated from 2012 to 2013 and from 2013 to 2014.
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.
GlaxoSmithKline PLC adjusted financial leverage ratio decreased from 2012 to 2013 but then increased from 2013 to 2014 exceeding 2012 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. GlaxoSmithKline PLC adjusted ROE deteriorated from 2012 to 2013 but then improved from 2013 to 2014 not reaching 2012 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. GlaxoSmithKline PLC adjusted ROA deteriorated from 2012 to 2013 and from 2013 to 2014.

GlaxoSmithKline PLC, Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Profit attributable to shareholders 4,655 9,009 7,424 8,174 2,515
Turnover 38,855 43,926 42,984 42,553 43,700
Profitability Ratio
Net profit margin1 11.98% 20.51% 17.27% 19.21% 5.76%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions, translated from GBP £)
Adjusted profit attributable to shareholders 3,633 8,131 7,818 8,414 2,333
Turnover 38,855 43,926 42,984 42,553 43,700
Profitability Ratio
Adjusted net profit margin2 9.35% 18.51% 18.19% 19.77% 5.34%

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

2014 Calculations

1 Net profit margin = 100 × Profit attributable to shareholders ÷ Turnover
= 100 × 4,655 ÷ 38,855 = 11.98%

2 Adjusted net profit margin = 100 × Adjusted profit attributable to shareholders ÷ Turnover
= 100 × 3,633 ÷ 38,855 = 9.35%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. GlaxoSmithKline PLC adjusted net profit margin ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Turnover 38,855 43,926 42,984 42,553 43,700
Total assets 68,656 69,748 67,450 63,828 64,999
Activity Ratio
Total asset turnover1 0.57 0.63 0.64 0.67 0.67
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions, translated from GBP £)
Turnover 38,855 43,926 42,984 42,553 43,700
Adjusted total assets 64,116 66,294 63,571 59,402 61,050
Activity Ratio
Adjusted total asset turnover2 0.61 0.66 0.68 0.72 0.72

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

2014 Calculations

1 Total asset turnover = Turnover ÷ Total assets
= 38,855 ÷ 68,656 = 0.57

2 Adjusted total asset turnover = Turnover ÷ Adjusted total assets
= 38,855 ÷ 64,116 = 0.61

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. GlaxoSmithKline PLC adjusted total asset turnover ratio deteriorated from 2012 to 2013 and from 2013 to 2014.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Total assets 68,656 69,748 67,450 63,828 64,999
Shareholders’ equity 7,200 11,596 9,449 12,480 13,679
Solvency Ratio
Financial leverage1 9.54 6.01 7.14 5.11 4.75
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions, translated from GBP £)
Adjusted total assets 64,116 66,294 63,571 59,402 61,050
Adjusted shareholders’ equity 3,412 9,291 7,203 9,330 10,817
Solvency Ratio
Adjusted financial leverage2 18.79 7.14 8.83 6.37 5.64

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

2014 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity
= 68,656 ÷ 7,200 = 9.54

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 64,116 ÷ 3,412 = 18.79

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.
GlaxoSmithKline PLC adjusted financial leverage ratio decreased from 2012 to 2013 but then increased from 2013 to 2014 exceeding 2012 level.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Profit attributable to shareholders 4,655 9,009 7,424 8,174 2,515
Shareholders’ equity 7,200 11,596 9,449 12,480 13,679
Profitability Ratio
ROE1 64.65% 77.69% 78.57% 65.50% 18.39%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions, translated from GBP £)
Adjusted profit attributable to shareholders 3,633 8,131 7,818 8,414 2,333
Adjusted shareholders’ equity 3,412 9,291 7,203 9,330 10,817
Profitability Ratio
Adjusted ROE2 106.49% 87.51% 108.53% 90.17% 21.57%

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

2014 Calculations

1 ROE = 100 × Profit attributable to shareholders ÷ Shareholders’ equity
= 100 × 4,655 ÷ 7,200 = 64.65%

2 Adjusted ROE = 100 × Adjusted profit attributable to shareholders ÷ Adjusted shareholders’ equity
= 100 × 3,633 ÷ 3,412 = 106.49%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. GlaxoSmithKline PLC adjusted ROE deteriorated from 2012 to 2013 but then improved from 2013 to 2014 not reaching 2012 level.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Profit attributable to shareholders 4,655 9,009 7,424 8,174 2,515
Total assets 68,656 69,748 67,450 63,828 64,999
Profitability Ratio
ROA1 6.78% 12.92% 11.01% 12.81% 3.87%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions, translated from GBP £)
Adjusted profit attributable to shareholders 3,633 8,131 7,818 8,414 2,333
Adjusted total assets 64,116 66,294 63,571 59,402 61,050
Profitability Ratio
Adjusted ROA2 5.67% 12.26% 12.30% 14.16% 3.82%

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

2014 Calculations

1 ROA = 100 × Profit attributable to shareholders ÷ Total assets
= 100 × 4,655 ÷ 68,656 = 6.78%

2 Adjusted ROA = 100 × Adjusted profit attributable to shareholders ÷ Adjusted total assets
= 100 × 3,633 ÷ 64,116 = 5.67%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. GlaxoSmithKline PLC adjusted ROA deteriorated from 2012 to 2013 and from 2013 to 2014.