Sherwin-Williams Co. (NYSE:SHW)

Asset Turnover

The reported total asset turnover shows a generally increasing trend from 0.9 in 2020 to a peak of 1.0 in 2023, followed by a slight decline to 0.98 in 2024, indicating improved efficiency in asset utilization over the period but a minor slowdown at the end. The adjusted total asset turnover follows a similar pattern, increasing from 0.89 in 2020 to 0.98 in 2023 before decreasing slightly to 0.95 in 2024, reflecting consistent operational performance adjustments.

Current Ratio

The reported current ratio fluctuates, decreasing from 1.0 in 2020 to 0.88 in 2021, rising again to 0.99 in 2022, and then falling sharply to 0.83 and 0.79 in the subsequent years, suggesting weakening short-term liquidity. The adjusted current ratio mirrors this volatility but remains generally higher than the reported ratio, peaking at 1.13 in 2022 before declining to 0.89 in 2024, indicating some conservatism in liquidity measurement adjustments but an overall downward trend in current assets relative to liabilities.

Debt to Equity

Reported debt to equity ratios reveal a significant increase from 2.3 in 2020 to 3.95 in 2021, followed by a steady decline to 2.49 in 2024. Adjusted debt to equity ratios also increase sharply in 2021 from 2.11 to 3.01, then decrease more smoothly to 2.27 by 2024. This pattern indicates a peak in leverage usage around 2021 with gradual deleveraging in subsequent years.

Debt to Capital

Both reported and adjusted debt to capital ratios initially rise from around 0.68-0.70 in 2020 to 0.75-0.80 in 2021, then progressively decline through 2024, reaching 0.69-0.71. This trend aligns with the deleveraging observed in the debt to equity ratios, reflecting improved capital structure stability.

Financial Leverage

Financial leverage exhibits a sharp increase in 2021, reaching 8.48 reported and 5.56 adjusted, from much lower levels in 2020. Subsequent years demonstrate a consistent decrease in leverage, with the reported ratio falling to 5.83 and adjusted to 4.55 in 2024. This suggests a period of increased leverage followed by a deliberate reduction to lessen financial risk.

Net Profit Margin

The reported net profit margin declines from 11.06% in 2020 to a low of 9.12% in 2022, then improves steadily to 11.61% in 2024. The adjusted net profit margin shows minor fluctuations but remains relatively stable, with a slight increase from 10.0% in 2020 to 10.06% in 2024. This indicates operational profitability challenges early in the period but gradual recovery towards improved margins by 2024.

Return on Equity (ROE)

Reported ROE peaks sharply in 2021 at 76.5%, significantly higher than the 56.23% in 2020, before declining to around 64-66% from 2022 to 2024. Adjusted ROE also spikes in 2021 (54.25%) but follows a downward trajectory to 43.63% in 2024. The disparity between reported and adjusted figures suggests that leverage and extraordinary items affect reported ROE, with adjusted measures indicating a more moderate but steady return on shareholder equity over time.

Return on Assets (ROA)

Reported ROA decreases from 9.95% in 2020 to 8.94% in 2022, then rises to 11.35% by 2024, suggesting improved asset profitability in later years. The adjusted ROA varies less dramatically, maintaining a range between 8.87% and 9.75%, with a moderate upward slope towards 2024, reflecting consistent asset performance adjustments.

Net Sales

Net sales exhibited a consistent upward trend from 2020 through 2024. Beginning at approximately 18.36 billion USD in 2020, sales increased steadily each year, reaching about 23.1 billion USD by 2023 and slightly higher to approximately 23.1 billion USD in 2024. This represents a notable growth of around 25.8% over the five-year period, with the most significant annual increases occurring between 2020 and 2022.

Total Assets

Total assets also showed a gradual increase over the period analyzed. Starting at roughly 20.4 billion USD in 2020, total assets grew to slightly over 23.6 billion USD by the end of 2024. The growth pace was relatively steady, although the increments reduced in magnitude toward the latter years.

Reported Total Asset Turnover

The reported total asset turnover ratio, which measures the efficiency of asset use to generate sales, demonstrated a positive trend until 2023. The ratio increased from 0.90 in 2020 to peak at 1.00 in 2023, suggesting improved asset utilization efficiency. However, in 2024, there was a slight decline to 0.98, indicating a minor reduction in turnover efficiency.

Adjusted Total Assets

Adjusted total assets followed a pattern similar to total assets, increasing from approximately 20.7 billion USD in 2020 to around 24.3 billion USD by 2024. The adjusted figures consistently remained higher than reported total assets, reflecting adjustments in asset valuation or classification. The growth trend was steady throughout the period.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio showed a gradual improvement from 0.89 in 2020 to 0.98 in 2023, aligning closely with the reported turnover ratio trend. However, this ratio also slightly declined to 0.95 in 2024. This suggests that while asset efficiency improved over the initial years, there was a marginal decrease in efficiency in the most recent year, even when considering adjusted asset values.

Current Assets

The current assets showed an overall increasing trend from 2020 to 2022, rising from 4,591,400 to 5,907,700 thousand US dollars. However, after 2022, current assets declined in 2023 and 2024 to 5,512,900 and 5,400,800 thousand US dollars respectively.

Current Liabilities

Current liabilities increased steadily throughout the period, starting at 4,594,400 thousand US dollars in 2020 and rising to 6,808,700 thousand US dollars by the end of 2024. This consistent growth in liabilities contrasts with the fluctuation observed in current assets.

Reported Current Ratio

The reported current ratio decreased overall from 1.00 in 2020 to 0.79 in 2024, indicating a decline in short-term liquidity. After a dip in 2021 to 0.88, the ratio rebounded slightly to 0.99 in 2022, before declining again in the subsequent years.

Adjusted Current Assets

The adjusted current assets trend is upward from 2020 through 2022, increasing from 4,957,000 to 6,757,000 thousand US dollars. Following 2022, adjusted current assets dropped to 6,240,500 in 2023 and further decreased to 6,091,400 thousand US dollars in 2024, similar to the pattern shown by reported current assets but at higher values.

Adjusted Current Ratio

The adjusted current ratio began at 1.08 in 2020 and remained stable at 1.00 in 2021. It improved to 1.13 in 2022, suggesting healthier liquidity after adjustment. Nevertheless, it declined in the last two years to 0.94 in 2023 and further to 0.89 in 2024, though it remained consistently higher than the reported current ratio.

Summary of Insights

There is a clear pattern of rising current liabilities throughout the five-year period, which exerts downward pressure on the current ratios. Both reported and adjusted current ratios indicate a decline in liquidity over the last two years, despite a peak in 2022. Adjusted figures consistently show better liquidity conditions than the reported ones, possibly reflecting the exclusion or adjustment of certain less liquid current asset components. The decline in current assets and adjusted current assets in 2023 and 2024 suggests a contraction in liquid resources, which, when combined with rising liabilities, signals potential challenges in meeting short-term obligations.

Total Debt

The total debt exhibits an overall increasing trend from 2020 through 2024, rising from approximately 8.29 billion USD to nearly 10.08 billion USD. There is a steady growth from 2020 to 2022, peaking at about 10.57 billion USD in 2022, followed by a slight decline in 2023 before rising slightly again in 2024.

Shareholders’ Equity

Shareholders’ equity decreased significantly from 3.61 billion USD in 2020 to 2.44 billion USD in 2021, but then showed a recovery trend over the next three years, reaching approximately 4.05 billion USD by the end of 2024. This suggests initial erosion followed by steady restoration of equity value.

Reported Debt to Equity Ratio

This ratio increased sharply in 2021 to 3.95 from 2.3 in 2020, indicating a rise in leverage primarily due to the equity decline. The ratio then declined consistently through 2024, settling at 2.49, reflecting a reduction in financial risk as equity improved despite rising debt levels.

Adjusted Total Debt

The adjusted total debt shows a similar increasing pattern to total debt but at higher absolute values due to adjustments. The figure rises from roughly 10.11 billion USD in 2020 to 12.10 billion USD in 2024. Variations mirror total debt trends but with slightly more pronounced fluctuations.

Adjusted Shareholders’ Equity

Adjusted equity declines from 4.80 billion USD in 2020 to 3.82 billion USD in 2021, then increases steadily to reach 5.33 billion USD in 2024. This trajectory aligns with the reported equity trend but at higher valuation levels after adjustments.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio follows a comparable pattern to the reported ratio; it spikes from 2.11 in 2020 to 3.01 in 2021, reflecting increased leverage, then decreases gradually to 2.27 in 2024. This indicates improving capital structure stability over the period.

Total Debt

The total debt has increased from approximately 8.29 billion US dollars in 2020 to around 10.08 billion US dollars in 2024. There was a steady rise each year, with the peak occurring in 2022 at roughly 10.57 billion, followed by a slight decline in 2023 before increasing again in 2024.

Total Capital

Total capital showed overall growth from about 11.9 billion US dollars in 2020 to approximately 14.13 billion in 2024. Notably, the increase was continuous, with the largest increment observed between 2021 and 2022 before experiencing a marginal dip in 2023, then rising again in 2024.

Reported Debt to Capital Ratio

The reported debt to capital ratio rose from 0.7 in 2020 to a high of 0.8 in 2021, indicating an increased leverage relative to capital. Subsequently, this ratio declined gradually to 0.71 by 2024, suggesting a trend toward reducing leverage over the latter years.

Adjusted Total Debt

Adjusted total debt increased from around 10.11 billion US dollars in 2020 to about 12.10 billion in 2024. Similar to total debt, the figure peaked in 2022 and then showed a decrease in 2023 before rising again in 2024, reflecting parallel movements but at higher absolute levels.

Adjusted Total Capital

Adjusted total capital rose steadily from approximately 14.91 billion US dollars in 2020 to 17.43 billion in 2024. The trajectory follows a consistent increase with a minor dip observed in 2023, aligning with the pattern seen in total capital figures but at a larger scale.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio increased from 0.68 in 2020 to 0.75 in 2021, signaling higher leverage after adjustments. From 2021 onward, the ratio progressively declined to 0.69 in 2024, indicating improved capital structure and reduced debt dependency over time after adjustment.

Summary

Overall, the financial data reveals a trend of rising debt and capital levels over the five-year period, with peak leverage ratios occurring in 2021 and 2022. From 2022 forward, both reported and adjusted debt to capital ratios demonstrate a downward trend, suggesting a strategic reduction in leverage relative to capital. Minor fluctuations in 2023 across multiple metrics hint at possible transitional financial adjustment before resuming upward growth in 2024. The adjusted figures remain consistently higher than the reported ones, reflecting additional considerations in debt and capital measurements but maintaining similar trend patterns.

Total Assets

Total assets exhibited a steady upward trajectory over the five-year period. Starting at approximately 20.4 billion US dollars in 2020, the total assets increased incrementally each year, reaching nearly 23.6 billion US dollars by 2024. This consistent growth suggests ongoing asset accumulation or investment activity.

Shareholders’ Equity

Shareholders’ equity showed some volatility before establishing a clear growth trend. Initially, it declined from about 3.61 billion US dollars in 2020 to approximately 2.44 billion US dollars in 2021, indicating possible losses or increased liabilities. However, it recovered in subsequent years, rising steadily to approximately 4.05 billion US dollars by 2024. This recovery and growth reflect improved profitability or capital injections.

Reported Financial Leverage

The reported financial leverage ratio started relatively high at 5.65 in 2020, peaked sharply at 8.48 in 2021, and then decreased progressively over the following years to 5.83 by 2024. The spike in 2021 indicates increased reliance on debt financing relative to equity, while the subsequent declines suggest a reduction in leverage and potentially a stronger equity base or debt repayment.

Adjusted Total Assets

Adjusted total assets followed a similar upward pattern to the unadjusted total assets, increasing from about 20.7 billion US dollars in 2020 to roughly 24.3 billion US dollars in 2024. The adjustments appear to elevate asset values slightly above reported figures consistently, indicating possible revaluation or inclusion of additional asset components.

Adjusted Shareholders’ Equity

Adjusted shareholders’ equity also experienced a decline in 2021 from 4.80 billion US dollars in 2020 to about 3.82 billion US dollars, mirroring the trend in reported equity but at higher absolute amounts. Thereafter, it increased steadily year-over-year, reaching approximately 5.33 billion US dollars by 2024. This suggests the adjustments consistently augment the equity base, potentially reflecting a more comprehensive valuation.

Adjusted Financial Leverage

The adjusted financial leverage ratios were lower than the reported ones throughout the period, starting at 4.31 in 2020, rising to 5.56 in 2021, and then steadily declining to 4.55 by 2024. The lower leverage ratios in the adjusted figures imply that the adjustments result in a stronger equity position or assets basis, which reduces the leverage metrics.

Overall Observations

The financial data reveals resilience and strengthening capital structure after a dip in equity measures in 2021. Both reported and adjusted data depict an initial stress or increased leverage in 2021, followed by gradual recovery and improvement. The consistent growth in assets and equity through 2024 points to positive operational or financial developments. Leverage trends indicate a cautious deleveraging approach, enhancing financial stability over time. The adjustments to assets and equity provide a more favorable view of financial strength compared to reported figures.

The financial data reveals a dynamic performance trajectory over the examined five-year period. Net income demonstrates variability with an initial decline from 2,030,400 thousand US dollars at the end of 2020 to 1,864,400 thousand US dollars in 2021, followed by a recovery and growth, reaching a peak of 2,681,400 thousand US dollars by the end of 2024. This pattern indicates an initial period of contraction succeeded by substantial profitability improvement.

Net sales exhibit a consistent upward trend throughout the timeframe. Starting from 18,361,700 thousand US dollars in 2020, sales progressed each year, culminating at 23,098,500 thousand US dollars in 2024. This steady increase in sales underlines a positive revenue growth trajectory, which likely supports the observed recovery and growth in net income.

The reported net profit margin decreases from 11.06% in 2020 to its lowest point of 9.12% in 2022. Following this decline, it gradually recovers to 11.61% in 2024, surpassing the initial margin recorded in 2020. This fluctuation in profitability relative to sales suggests periods of increased costs or decreased efficiency during the middle years, subsequently addressed to improve profit margins.

Adjusted net income trends differ slightly from the reported net income, displaying a relatively smoother evolution. It climbed from 1,836,600 thousand US dollars in 2020 to 2,324,600 thousand US dollars by the end of 2024, with minor fluctuations in the intermediate years. This indicates adjustments that moderate some of the volatility seen in reported net income, reflecting a steadier underlying profitability.

The adjusted net profit margin starts at 10% in 2020, experiences a modest rise to 10.39% in 2021, then declines to 9.59% in 2022, followed by a slight recovery to 10.06% in 2024. This pattern is consistent with the reported profit margin but with less pronounced changes, reinforcing the notion of stabilized adjusted profitability over time.

Summary of Trends:

- Initial dip and subsequent recovery in net income suggest operational or market challenges in 2021, overcome in later periods.

- Consistent growth in net sales implies expanding market presence or increased demand.

- Profit margins contracted mid-period but improved by 2024, indicating enhanced cost management or pricing strategy adjustments.

- Adjusted results show less volatility than reported figures, highlighting the impact of non-recurring items or accounting adjustments on earnings.

Net Income

Net income exhibited some fluctuation over the observed period. It decreased from 2,030,400 thousand USD in 2020 to 1,864,400 thousand USD in 2021, then recovered to 2,020,100 thousand USD in 2022. A stronger upward trend was observed afterwards, with net income rising to 2,388,800 thousand USD in 2023 and further increasing to 2,681,400 thousand USD in 2024.

Shareholders’ Equity

Shareholders’ equity showed a declining trend between 2020 and 2021, dropping from 3,610,800 thousand USD to 2,437,200 thousand USD. This was followed by a gradual recovery and growth over the next three years, reaching 3,102,100 thousand USD in 2022, 3,715,800 thousand USD in 2023, and 4,051,200 thousand USD in 2024.

Reported Return on Equity (ROE)

The reported ROE demonstrated high volatility during the period. Starting at 56.23% in 2020, it surged to a peak of 76.5% in 2021, then declined sharply to 65.12% in 2022. The ratio slightly decreased to 64.29% in 2023 but modestly increased again to 66.19% in 2024. Overall, reported ROE remained relatively elevated throughout the years.

Adjusted Net Income

Adjusted net income showed a generally positive trend. It increased from 1,836,600 thousand USD in 2020 to 2,072,200 thousand USD in 2021, and continued to rise steadily reaching 2,123,200 thousand USD in 2022, 2,217,000 thousand USD in 2023, and finally 2,324,600 thousand USD in 2024.

Adjusted Shareholders’ Equity

Adjusted shareholders’ equity mirrored a similar pattern to the unadjusted equity but at higher levels. The figure dropped from 4,798,200 thousand USD in 2020 to 3,819,700 thousand USD in 2021 before improving steadily in the following years. It reached 4,633,900 thousand USD in 2022, 5,089,900 thousand USD in 2023, and peaked at 5,328,200 thousand USD in 2024.

Adjusted Return on Equity (ROE)

Adjusted ROE illustrated a peak in 2021 at 54.25%, increasing sharply from 38.28% in 2020. This was followed by a decrease to 45.82% in 2022 and a continuous decline in subsequent years, with values of 43.56% in 2023 and 43.63% in 2024. Despite the decline after 2021, adjusted ROE remained above 40%, indicating sustained profitability relative to adjusted equity.

Net Income

The net income exhibits variability over the analyzed period. After a decline from 2,030,400 thousand USD in 2020 to 1,864,400 thousand USD in 2021, the figure stabilizes in 2022 at approximately 2,020,100 thousand USD. Subsequently, a consistent upward trend is observed with net income increasing to 2,388,800 thousand USD in 2023 and further to 2,681,400 thousand USD in 2024.

Total Assets

Total assets demonstrate steady growth throughout the period, rising from 20,401,600 thousand USD in 2020 to 23,632,600 thousand USD in 2024. The progression suggests continuous expansion or asset accumulation, with no indications of substantial volatility or decline.

Reported Return on Assets (ROA)

The reported ROA displays a fluctuating pattern. It decreases from 9.95% in 2020 to 9.02% in 2021 and slightly further to 8.94% in 2022. This is followed by a notable improvement, reaching 10.41% in 2023 and rising further to 11.35% in 2024. This trend indicates improving efficiency in utilizing assets to generate profits, particularly in the latter two years.

Adjusted Net Income

Adjusted net income reveals a consistent upward trajectory across all periods, contrasting with the reported net income’s initial fluctuation. Starting at 1,836,600 thousand USD in 2020, it increases steadily each year, attaining 2,324,600 thousand USD in 2024. This suggests that adjustments made to net income smooth out volatility and reflect a more stable profitability trend.

Adjusted Total Assets

Adjusted total assets also grow incrementally each year, moving from 20,699,600 thousand USD in 2020 to 24,255,700 thousand USD in 2024. The pattern is consistent with the trend observed in reported total assets, indicating sustained asset growth when accounting for adjustments.

Adjusted Return on Assets (ROA)

The adjusted ROA decreases slightly from 8.87% in 2020 to 8.75% in 2021, then increases to 9.09% in 2022. A modest but steady improvement follows, with 9.39% in 2023 and 9.58% in 2024. The adjusted ROA is generally lower than the reported ROA but shows less volatility, suggesting a more stable measure of operational efficiency.