Monsanto Co. (NYSE:MON)

The financial data reveals various patterns and trends in the components of intangible assets over the six-year period ending August 31, 2017.

Acquired Germplasm

The value of acquired germplasm experienced a slight but steady decline from 1144 million USD in 2012 to 1070 million USD in 2016, followed by a marginal increase to 1077 million USD in 2017. This indicates relatively stable but slightly declining investment or valuation in this asset category.

Acquired Intellectual Property

Intellectual property values rose gradually from 1085 million USD in 2012 to a peak of 1168 million USD in 2015, before dropping sharply to 1042 million USD in 2016 and experiencing a mild recovery to 1079 million USD in 2017. This pattern suggests a peak in asset value followed by a downward adjustment, potentially due to amortization or impairment.

Trademarks

Trademarks showed minor fluctuations within a narrow band, decreasing from 348 million USD in 2012 to 334 million USD in 2016, and ending at 335 million USD in 2017. This indicates a relatively stable valuation with slight periodic decreases.

Customer Relationships

Customer relationship assets increased from 285 million USD in 2012 to a high of 338 million USD in 2014, then declined steadily to 291 million USD by 2017. The initial growth followed by a decline suggests changes in customer contract values or amortization effects.

Other

The "Other" intangible assets category showed an increase from 168 million USD in 2012 to 181 million USD in 2014, but then experienced a significant drop to 65 million USD in 2016, with a slight recovery to 68 million USD in 2017. This sharp decrease might indicate disposals, impairments, or reclassification.

Other Intangible Assets, Finite Lives, Carrying Amount

This aggregate figure held relatively steady from 3030 million USD in 2012 to a peak of 3161 million USD in 2014, then declined to 2812 million USD in 2016 with a minor increase to 2850 million USD in 2017. The pattern suggests moderate volatility with an overall slight downward trend over the period.

Accumulated Amortization

The accumulated amortization balance fluctuated between -1841 million USD and -1918 million USD, showing decreases and recoveries without a clear directional trend. Notably, the amortization balance improved (reduced in magnitude) in 2014 but increased again by 2017, indicating ongoing amortization of intangible assets.

Other Intangible Assets, Finite Lives, Net

The net carrying amount of finite-lived intangible assets demonstrated variability, climbing to 1451 million USD in 2014 from 1189 million USD in 2012, then declining consistently to 932 million USD by 2017. This decline after 2014 may reflect amortization and impairment charge effects.

In Process Research & Development and Other Intangible Assets, Indefinite Lives

Both categories held nearly identical values, rising from 48 million USD in 2012 to 103 million USD in 2013 and 2014, then gradually decreasing to 92 million USD by 2016 and 2017. The matching values imply that these amounts represent the same or linked assets, with a notable increase early on followed by modest declines.

Other Intangible Assets, Net

The overall net value for other intangible assets increased noticeably from 1237 million USD in 2012 to 1554 million USD in 2014, followed by a steady decrease to 1024 million USD in 2017, indicating peaks and subsequent erosion in asset values over the period.

Goodwill

Goodwill rose significantly from 3435 million USD in 2012 to 4319 million USD in 2014, before decreasing steadily to 4020 million USD in 2016 and slightly increasing to 4088 million USD in 2017. This pattern may suggest acquisitions and impairments impacting goodwill values.

Goodwill and Other Intangible Assets Total

The combined value of goodwill and other intangible assets followed the same general pattern: a steady increase to a peak of 5873 million USD in 2014, followed by a decline to 5145 million USD in 2016 and stabilization around 5112 million USD in 2017. This trend suggests a peak in intangible asset valuations around 2014 with some subsequent write-downs or amortization reducing the total carrying value.

The financial data reflects several notable trends in the company's assets and equity over the examined periods.

Total Assets

Reported total assets demonstrated a gradual increase from 20,224 million US dollars in 2012 to a peak of 21,981 million in 2014, followed by fluctuations, with a decrease to 19,736 million in 2016 and a subsequent rise to 21,333 million in 2017. Adjusted total assets, which exclude goodwill, followed a similar pattern but at consistently lower values, indicating a significant portion of total assets attributable to goodwill. They increased steadily from 16,789 million in 2012 to 17,859 million in 2015, then declined to 15,716 million in 2016 before recovering to 17,245 million in 2017.

Shareowners’ Equity

The reported total Monsanto Company shareowners’ equity experienced a notable decline over the period, falling from 11,833 million in 2012 to a low of 4,534 million in 2016. A partial recovery was observed in 2017, with equity increasing to 6,438 million. Adjusted equity figures, which remove the effects of goodwill, showed a sharper downward trend, dropping from 8,398 million in 2012 to a minimal level of 514 million in 2016, then slightly rising to 2,350 million in 2017. This suggests substantial impairment or write-downs affecting goodwill and consequently reducing adjusted equity more severely than reported equity.

Insights

The disparity between reported and adjusted figures highlights the impact of goodwill on the balance sheet composition. While total assets and equity present moderate variability, the adjusted metrics reflect more pronounced declines, indicating possible asset impairments or reevaluations excluding goodwill. The overall pattern suggests a period of asset base stabilization with underlying challenges in maintaining equity levels when goodwill is excluded. The partial recovery in 2017 points toward some stabilization or positive adjustments but still reflects a diminished equity base relative to earlier years.

The data reveals distinct trends in the company's financial efficiency and profitability ratios over the six-year period ending August 31, 2017, with both reported and goodwill adjusted figures considered.

Total Asset Turnover

The reported total asset turnover ratio remains relatively stable, fluctuating slightly between 0.67 and 0.72 in the initial years before settling around 0.68 to 0.69 towards the end of the period. In contrast, the adjusted total asset turnover consistently shows higher values, starting at 0.80 and peaking at 0.90 in 2014, before moderating to around 0.85 by 2017. This indicates improved asset utilization when goodwill is excluded, although there is a slight decline after 2014.

Financial Leverage

Reported financial leverage increases steadily from 1.71 in 2012 to a peak of 4.35 in 2016, before decreasing to 3.31 in 2017. The adjusted leverage, however, exhibits more volatility with a significant spike in 2016, reaching 30.58, an extraordinary increase compared to previous years. Adjusted leverage begins near 2.0 in 2012, increases moderately until 2015, and then dramatically escalates in 2016, followed by a reduction to 7.34 in 2017. This spike suggests a major event affecting the capital structure or asset base once goodwill adjustments are accounted for, likely related to acquisition or impairment activities.

Return on Equity (ROE)

Reported ROE shows a strong upward trend, starting at 17.28% in 2012 and peaking at 35.1% in 2017, despite a slight dip in the intermediate years. Adjusted ROE magnifies this trend substantially, with a sharp increase after 2014, reaching an exceptionally high 259.92% in 2016 and then moderating to 96.17% in 2017. The extreme values in adjusted ROE highlight the significant impact of goodwill adjustments on shareholders' returns, with the pronounced 2016 spike likely influenced by the same factors driving adjusted financial leverage.

Return on Assets (ROA)

Reported ROA trends upwards initially, rising from 10.11% in 2012 to 12.47% in 2014, followed by a decline to 6.77% in 2016, and a partial recovery to 10.59% in 2017. The adjusted ROA mirrors this pattern but at consistently higher levels, peaking at 15.51% in 2014, then declining to 8.5% in 2016, and recovering to 13.11% in 2017. The adjusted figures reinforce the view that asset efficiency excluding goodwill remains better than reported figures but is subject to fluctuations corresponding with changes in asset base and earnings quality.

Overall, the analysis indicates that goodwill adjustments significantly affect leverage and profitability metrics, particularly around 2016, suggesting a substantial one-time event impacting the capital structure and asset valuation. The company’s operational efficiency in asset usage is relatively stable, with a slight decline post-2014. Profitability as measured by both ROE and ROA shows strong performance but is subject to notable variance once adjusted for goodwill, reflecting complexities in the underlying financial structure and earnings quality during the period assessed.

Total Assets

Reported total assets exhibited a generally stable trend with minor fluctuations, increasing from 20,224 million US dollars in 2012 to a peak of 21,981 million in 2014, followed by a decline to 19,736 million in 2016 and a subsequent recovery to 21,333 million in 2017. Adjusted total assets, which exclude goodwill, followed a similar trajectory, rising from 16,789 million in 2012 to 17,859 million in 2015, then decreasing to 15,716 million in 2016 before increasing again to 17,245 million in 2017.

Total Asset Turnover

Reported total asset turnover ratios remained relatively consistent throughout the period, ranging narrowly between 0.67 and 0.72 from 2012 to 2014, then slightly decreasing to 0.68 in 2015 and 2016 and marginally improving to 0.69 in 2017. The adjusted total asset turnover consistently presented higher values than the reported figures, starting at 0.8 in 2012 and increasing to a high of 0.9 in 2014. It subsequently experienced a decline to 0.84 in 2015, then a moderate recovery to 0.85 by 2017.

Key Observations

The data indicates that the company maintained relatively stable asset levels with minor adjustments over six years. The decline in both reported and adjusted total assets in 2016 suggests a possible divestiture or revaluation during that period, followed by asset growth in 2017. The higher adjusted total asset turnover compared to the reported figures implies that excluding goodwill results in a more efficient use of tangible or adjusted assets in generating revenue. Additionally, the peak in adjusted turnover in 2014 indicates the highest operational efficiency in asset utilization during the period examined, with some decline thereafter but maintaining a strong relative position compared to the reported figures.

The financial data reveals notable shifts in asset levels, equity, and leverage ratios over the presented periods. Total assets, both reported and adjusted for goodwill, exhibit an initial upward trend from 2012 through 2015, peaking around 2014 and 2015. Reported total assets increase from approximately 20.2 billion USD in 2012 to around 21.9 billion USD in 2014 and 2015 before declining to about 19.7 billion USD in 2016 and then slightly rising again to 21.3 billion USD in 2017. Adjusted total assets follow a similar trajectory, rising steadily from approximately 16.8 billion USD in 2012 to close to 17.9 billion USD in 2015, then decreasing noticeably to about 15.7 billion USD in 2016, and recovering marginally to 17.2 billion USD by 2017.

Shareowners' equity, both reported and adjusted, displays a contrasting pattern characterized by a marked decline across the time span. Reported equity declines from approximately 11.8 billion USD in 2012 to a low of 4.5 billion USD in 2016, slightly improving to 6.4 billion USD in 2017. The adjusted equity figures demonstrate a sharper contraction from about 8.4 billion USD in 2012 to a mere 0.5 billion USD in 2016, before partially rebounding to 2.4 billion USD in 2017. This reduction in equity suggests significant write-downs or impairments impacting shareholders’ net assets.

Financial leverage ratios reveal notable volatility and rising leverage over time, especially when adjusted for goodwill. The reported financial leverage ratio shows an increase from 1.71 in 2012 to a peak of 4.35 in 2016, followed by a decrease to 3.31 in 2017. Adjusted financial leverage exerts a more extreme pattern, climbing from 2.00 in 2012 to an exceptionally high 30.58 in 2016, before declining substantially to 7.34 in 2017. This sharp increase and subsequent adjustment reflect the significant reduction in adjusted equity, thereby amplifying leverage measures.

Overall, the data portrays a scenario where total asset levels remained relatively stable with slight fluctuations, while both reported and adjusted equity eroded considerably over the period. The increased financial leverage, especially the sharp spike in the adjusted ratio in 2016, highlights an elevated risk profile possibly associated with asset write-downs or other adjustments. The partial recovery in equity and leverage in 2017 indicates some stabilization after a period of financial stress.

Total Assets

Increased steadily from 2012 to 2015, followed by a decline in 2016 and a moderate rebound in 2017.

Shareowners’ Equity

Consistently decreased throughout the period, with a sharp decline to a low point in 2016 before partial recovery in 2017.

Financial Leverage

Reported leverage increased gradually, peaking in 2016, and falling in 2017. Adjusted leverage demonstrated dramatic escalation in 2016, reflective of very low adjusted equity, then fell substantially thereafter.

The financial data reflects notable changes and trends in equity and return on equity (ROE) for the company over the six-year period.

Total Shareowners’ Equity (Reported)

The reported total equity demonstrates a fluctuating pattern, increasing from $11,833 million in 2012 to $12,559 million in 2013, followed by a sharp decline to $7,875 million in 2014. This downward trend continues through 2016 reaching a low of $4,534 million before rebounding somewhat to $6,438 million in 2017. The overall movement indicates significant volatility in recorded equity during this period.

Total Shareowners’ Equity (Adjusted for Goodwill)

The adjusted equity, which accounts for goodwill, consistently shows lower values compared to reported equity, highlighting the impact of goodwill adjustments. Starting at $8,398 million in 2012, adjusted equity rises to $9,039 million in 2013 but then plunges sharply to $3,556 million in 2014 and further to $2,929 million in 2015. The decline continues, reaching a minimal level of $514 million in 2016, followed by a recovery to $2,350 million in 2017. This suggests significant goodwill impairments or write-downs occurred during these years, critically affecting the company's adjusted equity base.

Reported Return on Equity (ROE)

The reported ROE shows a general upward trend with some variability. It starts at 17.28% in 2012, increases to nearly 20% in 2013, and then exhibits a sharp increase to 34.79% in 2014. It remains elevated around the low 30% range in 2015 and 2016 before peaking at 35.1% in 2017. This rise in reported ROE despite declining equity values suggests profitability improvements or efficiency gains relative to equity during the latter years.

Adjusted Return on Equity (ROE)

The adjusted ROE, reflecting equity excluding goodwill effects, shows extreme volatility and notably higher magnitudes compared to the reported ROE. Beginning at 24.35% in 2012 and climbing to 27.46% in 2013, the ratio spikes dramatically to 77.05% in 2014 and reaches a peak of 259.92% in 2016 before dropping to 96.17% in 2017. The disproportionate increase in adjusted ROE is consistent with the substantial reduction in adjusted equity, amplifying the ratio. This indicates that while net income may have shown some stability or growth, the severely diminished equity base (post goodwill adjustment) exaggerated return calculations, reflecting underlying goodwill impairments rather than operational improvements alone.

In summary, the data reveals significant equity declines primarily influenced by goodwill adjustments, accompanied by sharp rises in adjusted ROE that signify the impact of a shrinking equity base rather than purely operational gains. The reported figures suggest a relatively stable or improving profitability environment, though the distressed equity situation under adjustment indicates caution in assessing the company's true financial health.

Total Assets

The reported total assets showed a general upward trend from 2012 to 2015, increasing from 20,224 million US dollars to 21,920 million US dollars. However, a notable decline occurred in 2016, dropping to 19,736 million US dollars, before rising again to 21,333 million US dollars in 2017. The adjusted total assets, which exclude goodwill, followed a similar pattern but with consistently lower values. They increased steadily from 16,789 million to 17,859 million US dollars between 2012 and 2015, then decreased to 15,716 million in 2016, and partially recovered to 17,245 million in 2017. This suggests fluctuations in asset composition, with goodwill impacting the reported totals, especially evident in the drop seen in 2016.

Return on Assets (ROA)

Both reported and adjusted ROA exhibit parallel trends, albeit with adjusted ROA consistently higher, reflecting a presumably cleaner measure of asset profitability excluding goodwill effects. The reported ROA increased from 10.11% in 2012 to a peak of 12.47% in 2014, then declined substantially to 6.77% in 2016 before rebounding to 10.59% in 2017. Adjusted ROA followed a similar curve, rising from 12.18% in 2012 to 15.51% in 2014, before dropping to 8.5% in 2016 and recovering somewhat to 13.11% in 2017. The decline in both measures in 2016 aligns with the decrease in total assets, indicating a challenging performance year possibly due to operational or market factors. The recovery in 2017 suggests improvement in asset utilization or profitability.

Overall Analysis

The data reveals cyclical fluctuations in asset base and profitability over the examined period. The presence and subsequent adjustments for goodwill significantly affect the asset figures and profitability ratios, highlighting the importance of considering adjusted metrics for performance assessment. The notable dip in 2016 across total assets and returns indicates a disruption or adverse event during that year, followed by a partial recovery in 2017. The adjusted ROA figures consistently exceeding reported ROA suggest that goodwill may be dilutive to perceived returns, emphasizing the value of adjusted analysis in evaluating operational efficiency and asset use.