Stock Analysis on Net

Medtronic PLC (NYSE:MDT)

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

Medtronic PLC, balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel
Apr 28, 2023 Apr 29, 2022 Apr 30, 2021 Apr 24, 2020 Apr 26, 2019 Apr 27, 2018
Goodwill 41,425 40,502 41,961 39,841 39,959 39,543
Customer-related 16,956 16,953 17,036 16,963 16,944 16,949
Purchased technology and patents 11,659 10,802 11,286 10,742 11,405 11,569
Trademarks and tradenames 486 473 475 464 570 822
Other 116 80 82 75 85 94
Definite-lived intangible assets, gross carrying amount 29,217 28,308 28,879 28,244 29,004 29,434
Accumulated amortization (14,605) (13,006) (11,533) (9,704) (9,048) (8,201)
Definite-lived intangible assets, net 14,612 15,302 17,346 18,540 19,956 21,233
IPR&D 232 293 394 523 604 490
Indefinite-lived intangible assets 232 293 394 523 604 490
Intangible assets, net 14,844 15,595 17,740 19,063 20,560 21,723
Goodwill and other intangible assets, net 56,269 56,097 59,701 58,904 60,519 61,266

Based on: 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24), 10-K (reporting date: 2019-04-26), 10-K (reporting date: 2018-04-27).

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. Medtronic PLC goodwill decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.
Intangible assets, net Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Medtronic PLC intangible assets, net decreased from 2021 to 2022 and from 2022 to 2023.
Goodwill and other intangible assets, net Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Medtronic PLC goodwill and other intangible assets, net decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.

Adjustments to Financial Statements: Removal of Goodwill

Medtronic PLC, adjustments to financial statements

US$ in millions

Microsoft Excel
Apr 28, 2023 Apr 29, 2022 Apr 30, 2021 Apr 24, 2020 Apr 26, 2019 Apr 27, 2018
Adjustment to Total Assets
Total assets (as reported) 90,948 90,981 93,083 90,689 89,694 91,393
Less: Goodwill 41,425 40,502 41,961 39,841 39,959 39,543
Total assets (adjusted) 49,523 50,479 51,122 50,848 49,735 51,850
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported) 51,483 52,551 51,428 50,737 50,091 50,720
Less: Goodwill 41,425 40,502 41,961 39,841 39,959 39,543
Shareholders’ equity (adjusted) 10,058 12,049 9,467 10,896 10,132 11,177

Based on: 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24), 10-K (reporting date: 2019-04-26), 10-K (reporting date: 2018-04-27).


Medtronic PLC, Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Goodwill (Summary)

Medtronic PLC, adjusted financial ratios

Microsoft Excel
Apr 28, 2023 Apr 29, 2022 Apr 30, 2021 Apr 24, 2020 Apr 26, 2019 Apr 27, 2018
Total Asset Turnover
Reported total asset turnover 0.34 0.35 0.32 0.32 0.34 0.33
Adjusted total asset turnover 0.63 0.63 0.59 0.57 0.61 0.58
Financial Leverage
Reported financial leverage 1.77 1.73 1.81 1.79 1.79 1.80
Adjusted financial leverage 4.92 4.19 5.40 4.67 4.91 4.64
Return on Equity (ROE)
Reported ROE 7.30% 9.59% 7.01% 9.44% 9.25% 6.12%
Adjusted ROE 37.36% 41.82% 38.09% 43.95% 45.71% 27.77%
Return on Assets (ROA)
Reported ROA 4.13% 5.54% 3.87% 5.28% 5.16% 3.40%
Adjusted ROA 7.59% 9.98% 7.05% 9.42% 9.31% 5.99%

Based on: 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24), 10-K (reporting date: 2019-04-26), 10-K (reporting date: 2018-04-27).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Medtronic PLC adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.
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.
Medtronic PLC adjusted financial leverage ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Medtronic PLC adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Medtronic PLC adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Medtronic PLC, Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel
Apr 28, 2023 Apr 29, 2022 Apr 30, 2021 Apr 24, 2020 Apr 26, 2019 Apr 27, 2018
As Reported
Selected Financial Data (US$ in millions)
Net sales 31,227 31,686 30,117 28,913 30,557 29,953
Total assets 90,948 90,981 93,083 90,689 89,694 91,393
Activity Ratio
Total asset turnover1 0.34 0.35 0.32 0.32 0.34 0.33
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net sales 31,227 31,686 30,117 28,913 30,557 29,953
Adjusted total assets 49,523 50,479 51,122 50,848 49,735 51,850
Activity Ratio
Adjusted total asset turnover2 0.63 0.63 0.59 0.57 0.61 0.58

Based on: 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24), 10-K (reporting date: 2019-04-26), 10-K (reporting date: 2018-04-27).

2023 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 31,227 ÷ 90,948 = 0.34

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 31,227 ÷ 49,523 = 0.63

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Medtronic PLC adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Apr 28, 2023 Apr 29, 2022 Apr 30, 2021 Apr 24, 2020 Apr 26, 2019 Apr 27, 2018
As Reported
Selected Financial Data (US$ in millions)
Total assets 90,948 90,981 93,083 90,689 89,694 91,393
Shareholders’ equity 51,483 52,551 51,428 50,737 50,091 50,720
Solvency Ratio
Financial leverage1 1.77 1.73 1.81 1.79 1.79 1.80
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 49,523 50,479 51,122 50,848 49,735 51,850
Adjusted shareholders’ equity 10,058 12,049 9,467 10,896 10,132 11,177
Solvency Ratio
Adjusted financial leverage2 4.92 4.19 5.40 4.67 4.91 4.64

Based on: 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24), 10-K (reporting date: 2019-04-26), 10-K (reporting date: 2018-04-27).

2023 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity
= 90,948 ÷ 51,483 = 1.77

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 49,523 ÷ 10,058 = 4.92

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.
Medtronic PLC adjusted financial leverage ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

Adjusted Return on Equity (ROE)

Microsoft Excel
Apr 28, 2023 Apr 29, 2022 Apr 30, 2021 Apr 24, 2020 Apr 26, 2019 Apr 27, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Medtronic 3,758 5,039 3,606 4,789 4,631 3,104
Shareholders’ equity 51,483 52,551 51,428 50,737 50,091 50,720
Profitability Ratio
ROE1 7.30% 9.59% 7.01% 9.44% 9.25% 6.12%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to Medtronic 3,758 5,039 3,606 4,789 4,631 3,104
Adjusted shareholders’ equity 10,058 12,049 9,467 10,896 10,132 11,177
Profitability Ratio
Adjusted ROE2 37.36% 41.82% 38.09% 43.95% 45.71% 27.77%

Based on: 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24), 10-K (reporting date: 2019-04-26), 10-K (reporting date: 2018-04-27).

2023 Calculations

1 ROE = 100 × Net income attributable to Medtronic ÷ Shareholders’ equity
= 100 × 3,758 ÷ 51,483 = 7.30%

2 Adjusted ROE = 100 × Net income attributable to Medtronic ÷ Adjusted shareholders’ equity
= 100 × 3,758 ÷ 10,058 = 37.36%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Medtronic PLC adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Apr 28, 2023 Apr 29, 2022 Apr 30, 2021 Apr 24, 2020 Apr 26, 2019 Apr 27, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Medtronic 3,758 5,039 3,606 4,789 4,631 3,104
Total assets 90,948 90,981 93,083 90,689 89,694 91,393
Profitability Ratio
ROA1 4.13% 5.54% 3.87% 5.28% 5.16% 3.40%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to Medtronic 3,758 5,039 3,606 4,789 4,631 3,104
Adjusted total assets 49,523 50,479 51,122 50,848 49,735 51,850
Profitability Ratio
Adjusted ROA2 7.59% 9.98% 7.05% 9.42% 9.31% 5.99%

Based on: 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24), 10-K (reporting date: 2019-04-26), 10-K (reporting date: 2018-04-27).

2023 Calculations

1 ROA = 100 × Net income attributable to Medtronic ÷ Total assets
= 100 × 3,758 ÷ 90,948 = 4.13%

2 Adjusted ROA = 100 × Net income attributable to Medtronic ÷ Adjusted total assets
= 100 × 3,758 ÷ 49,523 = 7.59%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Medtronic PLC adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.