Lockheed Martin Corp. (NYSE:LMT)

Goodwill remained relatively stable over the observed period, experiencing a slight increase from $10,813 million in 2021 to $11,314 million in 2025. While fluctuations occurred, the overall trend suggests a moderate growth in goodwill. Customer programs remained consistently valued at $3,186 million from 2022 through 2025. Customer relationships experienced a decrease from $120 million in 2021 to $94 million and remained constant thereafter. The 'Other' intangible asset category showed significant growth, increasing from $76 million in 2021 to $281 million in 2025.

Finite-Lived Intangibles

The gross carrying amount of finite-lived intangibles increased from $3,380 million in 2021 to $3,561 million in 2025. However, accumulated amortization increased substantially, moving from -$1,561 million in 2021 to -$2,511 million in 2025. Consequently, the net carrying amount of finite-lived intangibles decreased significantly, declining from $1,819 million in 2021 to $1,050 million in 2025. This indicates a consistent and accelerating amortization expense impacting the value of these assets.

Trademark values decreased from $887 million in 2021 and 2022 to $837 million in 2024 and 2025. Indefinite-lived intangibles mirrored this trend, decreasing from $887 million to $837 million over the same period. Acquired intangibles demonstrated a consistent downward trend, decreasing from $2,706 million in 2021 to $1,887 million in 2025. This decline suggests a consistent reduction in the value of acquired intangible assets, potentially through impairment or amortization (though the latter is not applicable to indefinite-lived intangibles).

Goodwill and Acquired Intangibles Combined

The combined value of goodwill and acquired intangibles decreased from $13,519 million in 2021 to $13,011 million in 2023, before increasing slightly to $13,201 million in 2025. The initial decrease is primarily driven by the decline in acquired intangibles, while the later increase is attributable to the growth in goodwill and a slower rate of decline in acquired intangibles.

Overall, the analysis reveals a consistent pattern of decreasing value in acquired and finite-lived intangibles, offset by relatively stable goodwill and growth in the 'Other' intangible asset category. The increasing amortization expense associated with finite-lived intangibles is a notable trend. The decrease in trademark and indefinite-lived intangibles warrants further investigation.

An examination of the financial information reveals significant adjustments made to total assets and stockholders’ equity over the five-year period. These adjustments appear to be primarily related to the removal of goodwill and intangible assets from the balance sheet, resulting in substantial differences between reported and adjusted figures.

Total Assets

Reported total assets increased from US$50,873 million in 2021 to US$59,840 million in 2025, indicating overall growth. However, adjusted total assets present a different picture. While also increasing over the period, the growth is considerably more moderate, rising from US$40,060 million in 2021 to US$48,526 million in 2025. The divergence between reported and adjusted total assets widens each year, suggesting a consistent reduction of goodwill and intangible assets from the reported figures. The largest absolute difference between reported and adjusted total assets is observed in 2025, at US$11,314 million.

Stockholders’ Equity

Reported stockholders’ equity demonstrates a substantial decline from US$10,959 million in 2021 to US$6,721 million in 2025. Conversely, adjusted stockholders’ equity is significantly lower and negative throughout the period, starting at US$146 million in 2021 and decreasing to negative US$4,593 million by 2025. This negative adjusted equity suggests that the removal of goodwill and intangible assets has a considerable adverse impact on the net asset value attributable to shareholders. The gap between reported and adjusted stockholders’ equity expands dramatically over the five years, highlighting the magnitude of the adjustments.

The consistent reduction in adjusted total assets and the resulting negative adjusted stockholders’ equity indicate a substantial write-down of goodwill and intangible assets. This suggests that previously recognized values are no longer supportable based on current assessments. The trend implies a potential overvaluation of assets in prior periods, and the adjustments reflect a more conservative valuation approach. The impact on reported equity is significant, and the negative adjusted equity warrants further investigation into the underlying causes and potential implications for the company’s financial health.

The financial metrics demonstrate a significant impact from the removal of goodwill and intangible assets when calculating adjusted ratios. Reported ratios generally exhibit more moderate fluctuations, while adjusted ratios reveal substantially different magnitudes and, in some cases, incomplete information for later periods.

Total Asset Turnover

Reported total asset turnover remained relatively stable between 2021 and 2025, fluctuating between 1.25 and 1.32. In contrast, the adjusted total asset turnover consistently exceeded the reported figure, beginning at 1.67 in 2021 and declining to 1.55 by 2025. This suggests that the inclusion of goodwill significantly reduces the calculated asset turnover ratio.

Financial Leverage

Reported financial leverage exhibited a clear upward trend from 4.64 in 2021 to 8.90 in 2025, indicating increasing reliance on debt financing. However, the adjusted financial leverage, available only for 2021, was exceptionally high at 274.38. The absence of adjusted leverage figures for subsequent years limits the ability to assess the trend following the goodwill adjustment.

Return on Equity (ROE)

Reported ROE experienced volatility, peaking at 101.24% in 2023 before declining to 74.65% in 2025. The adjusted ROE, calculated only for 2021, was extraordinarily high at 4,325.34%. Similar to financial leverage, the lack of adjusted ROE figures for 2022-2025 hinders a comprehensive trend analysis.

Return on Assets (ROA)

Reported ROA showed a decline from 12.41% in 2021 to 8.38% in 2025. The adjusted ROA, while also decreasing over the period, remained consistently higher than the reported ROA, moving from 15.76% in 2021 to 10.34% in 2025. This indicates that the exclusion of goodwill and intangible assets results in a more favorable assessment of asset efficiency.

The substantial differences between reported and adjusted ratios, particularly for ROE and financial leverage in 2021, highlight the considerable impact of goodwill on the company’s financial performance as initially presented. The incomplete adjusted figures for later years prevent a full understanding of how this impact evolves over time. Further investigation into the reasons for the missing adjusted values is recommended.

Analysis reveals distinct trends in both reported and adjusted total asset turnover ratios over the five-year period. While the reported total asset turnover demonstrates relative stability, the adjusted ratio, which accounts for the exclusion of goodwill and intangible assets, exhibits a more nuanced pattern.

Reported Total Asset Turnover

The reported total asset turnover ratio experienced a slight decrease from 1.32 in 2021 to 1.25 in 2022. A modest recovery to 1.29 was noted in 2023, followed by a further slight decline to 1.28 in 2024. The ratio concluded the period at 1.25 in 2025, mirroring the 2022 level. This suggests a generally stable, but potentially softening, efficiency in utilizing total assets to generate revenue.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio began at 1.67 in 2021 and decreased to 1.57 in 2022. An increase to 1.62 was observed in 2023, followed by a slight decrease to 1.59 in 2024. The ratio finished the period at 1.55 in 2025. This pattern indicates a generally higher level of asset efficiency when goodwill and intangible assets are excluded from the asset base, but also a gradual downward trend over the five-year timeframe.

The difference between the reported and adjusted ratios consistently widens over the period. This suggests that a significant portion of the company’s assets are comprised of goodwill and intangible assets, which contribute less to revenue generation relative to other assets. The decreasing adjusted ratio, despite remaining higher than the reported ratio, warrants further investigation into the underlying drivers of asset utilization and the performance of these intangible assets.

Asset Base Composition

Reported total assets increased from US$50,873 million in 2021 to US$59,840 million in 2025, representing a growth of approximately 17.6%. However, adjusted total assets grew from US$40,060 million to US$48,526 million, a growth of approximately 21.1%. This disparity indicates that the growth in reported assets is disproportionately attributable to goodwill and intangible assets.

The observed trends suggest that while the company maintains a reasonable level of asset turnover, the increasing reliance on goodwill and intangible assets may be impacting overall efficiency metrics. Continued monitoring of these ratios, alongside a detailed analysis of the performance of goodwill and intangible assets, is recommended.

The period between 2021 and 2025 demonstrates significant fluctuations in reported and adjusted financial metrics. Reported total assets generally increased over the five-year period, while adjusted total assets show a more moderate increase, with a slight decrease observed between 2022 and 2023. Reported stockholders’ equity experienced a substantial decline from 2021 to 2023, followed by a modest recovery in 2024 and 2025. Conversely, adjusted stockholders’ equity is significantly negative throughout the period, and becomes increasingly negative.

Reported Financial Leverage

Reported financial leverage consistently increased from 4.64 in 2021 to 8.90 in 2025, indicating a growing reliance on debt financing relative to equity. This upward trend suggests an increasing financial risk profile based on reported figures.

Adjusted Financial Leverage

Adjusted financial leverage was exceptionally high in 2021 at 274.38. Values for 2022 through 2025 are not available. The initial value suggests a substantial difference between reported and adjusted asset and equity positions, potentially stemming from the treatment of goodwill and intangible assets. The absence of subsequent values hinders a trend analysis, but the initial figure warrants further investigation into the adjustments made to arrive at these values.

The divergence between reported and adjusted figures, particularly concerning stockholders’ equity, is noteworthy. The negative adjusted stockholders’ equity consistently observed suggests that the adjustments made – likely related to intangible assets and goodwill – significantly erode the equity base when considered. The increasing reported financial leverage, coupled with the substantial and negative adjusted equity, indicates a potentially precarious capital structure when accounting for these adjustments.

Asset Trends

While reported total assets increased from US$50,873 million in 2021 to US$59,840 million in 2025, the adjusted total assets experienced a less pronounced increase, moving from US$40,060 million to US$48,526 million over the same period. This difference highlights the impact of intangible assets and goodwill on the overall asset base.

The lack of adjusted financial leverage figures for years after 2021 limits a comprehensive assessment of the company’s financial risk. Further analysis is needed to understand the specific adjustments made to arrive at the adjusted figures and their implications for the company’s long-term financial health.

Reported stockholders’ equity demonstrated a decline over the five-year period, decreasing from US$10,959 million in 2021 to US$6,721 million in 2025. Conversely, adjusted stockholders’ equity exhibited a significant negative trend, moving from a positive US$146 million in 2021 to a negative US$4,593 million in 2025. Reported return on equity (ROE) fluctuated, peaking at 101.24% in 2023 before decreasing to 74.65% in 2025. Adjusted ROE began at a very high level in 2021, but subsequent years have no values reported.

Stockholders’ Equity Trends

The decrease in reported stockholders’ equity suggests a potential return of capital to shareholders, share repurchases, or net losses impacting equity. The substantial negative values in adjusted stockholders’ equity indicate a significant impact from adjustments, potentially related to goodwill or intangible assets. The magnitude of the negative adjustment increases each year, suggesting a growing discrepancy between reported and adjusted equity.

Return on Equity Analysis

Reported ROE shows considerable volatility, with a high value in 2023 likely influenced by a combination of profitability and the declining equity base. The subsequent decrease in reported ROE in 2024 and 2025 could be attributed to lower profitability or a slower rate of equity decline. The absence of adjusted ROE values after 2021 limits the ability to assess the impact of the equity adjustments on profitability. The initial adjusted ROE value is exceptionally high, and its disappearance from subsequent years warrants further investigation into the nature of the adjustments and their effect on the company’s true profitability.

The divergence between reported and adjusted stockholders’ equity, coupled with the lack of adjusted ROE figures beyond 2021, raises concerns about the quality of reported earnings and the underlying sustainability of returns. Further investigation into the components of the adjustments to stockholders’ equity is recommended to understand the drivers of this trend and its implications for the company’s financial health.

Analysis reveals distinct trends in both reported and adjusted return on assets (ROA) over the five-year period. A notable difference exists between the two ROA calculations, stemming from adjustments made to total assets. Reported total assets demonstrate a generally increasing trajectory, while adjusted total assets show a more moderate increase, with a slight decrease observed between 2022 and 2023.

Reported Return on Assets (ROA)

Reported ROA experienced volatility throughout the period. It decreased from 12.41% in 2021 to 10.84% in 2022, then increased to 13.19% in 2023. A subsequent decline is observed in 2024 (9.59%) and 2025 (8.38%), indicating a downward trend in profitability relative to reported total assets in the latter years of the observed period.

Adjusted Return on Assets (ROA)

Adjusted ROA consistently exceeds reported ROA across all years. It began at 15.76% in 2021, decreased to 13.62% in 2022, and then rose to a peak of 16.61% in 2023. Similar to the reported ROA, a downward trend emerges in 2024 (11.98%) and 2025 (10.34%), though the adjusted ROA remains higher than its reported counterpart. The magnitude of the decrease from 2023 to 2025 is substantial.

Total Assets – Reported vs. Adjusted

The difference between reported and adjusted total assets widens over time. In 2021, adjusted total assets represented approximately 78.8% of reported total assets. By 2025, this proportion increased to approximately 81.1%. This suggests that the adjustments made to total assets are becoming a more significant factor in assessing the company’s asset base. The adjustments likely relate to the treatment of goodwill and intangible assets, impacting the overall asset value used in the ROA calculation.

The converging downward trends in both reported and adjusted ROA from 2023 to 2025 warrant further investigation. While adjusted ROA provides a potentially more accurate picture of underlying profitability by excluding certain asset components, the consistent decline in both metrics suggests a broader trend of decreasing returns. The increasing difference between reported and adjusted total assets highlights the importance of understanding the nature and impact of these adjustments on financial performance.