Stryker Corp. (NYSE:SYK)

The data reveals a consistent upward trend in goodwill, which increased steadily from 7,168 million USD in 2017 to 12,918 million USD in 2021. This significant growth, particularly notable between 2019 and 2020, suggests ongoing acquisitions or revaluations contributing to the company's intangible asset base.

Developed technologies experienced strong growth throughout the period, rising from 2,416 million USD in 2017 to 5,326 million USD in 2021. The largest year-over-year increase occurred between 2019 and 2020, indicating intensified investments or capitalization of costs related to technology development during that time.

Customer relationships remained relatively stable over the five years, showing only modest fluctuations around an average of approximately 2,200 million USD. This stability implies a consistent valuation without significant impairments or additions.

Patents show a slight decline overall, reducing from 340 million USD in 2017 to 343 million USD in 2021, with minor fluctuations indicating a generally steady valuation without large-scale additions or disposals.

Trademarks similarly exhibited minor changes, increasing slowly from 352 million USD in 2017 to a peak of 428 million USD in 2020 before slightly declining to 415 million USD in 2021. This suggests relatively stable brand asset values with some enhancement around 2020.

In-process research and development values were volatile, starting low at 25 million USD in 2017, dropping to 6 million USD in 2018, then rising sharply to 110 million USD in 2019 before gradual decline to 29 million USD in 2021. This pattern reflects fluctuating project stages or reclassifications within R&D activities.

The category labeled “Other” intangible assets increased from 93 million USD in 2017 to a peak of 128 million USD in 2018 and 2020, followed by a reduction to 105 million USD in 2021, indicating some variability in miscellaneous intangible asset components.

The gross carrying amount of other intangible assets rose markedly over the period, growing from 5,314 million USD in 2017 to 8,542 million USD in 2021. This growth aligns with increases in underlying components like developed technologies and goodwill.

Accumulated amortization consistently increased in magnitude, moving from negative 1,837 million USD in 2017 to negative 3,702 million USD in 2021. The steady rise in amortization expense reflects systematic allocation of intangible asset costs over their estimated useful lives.

Consequently, the net carrying amount of other intangible assets, which accounts for amortization, increased overall from 3,477 million USD in 2017 to 4,840 million USD in 2021, peaking at 5,554 million USD in 2020 before declining in the final year. This suggests that additions generally outpaced amortization except for a reversal in 2021.

The aggregate of goodwill and other intangible assets grew from 10,645 million USD in 2017 to a high of 18,332 million USD in 2020, then decreased slightly to 17,758 million USD in 2021. The rise indicates expansion of the intangible asset base, while the slight drop at the end may indicate impairment or asset disposals.

Total Assets

The reported total assets increased steadily from US$22,197 million in 2017 to US$34,631 million in 2021, reflecting a consistent growth trend over the five-year period. The adjusted total assets, which likely exclude goodwill or other intangible assets, also showed a rising pattern, growing from US$15,029 million to US$21,713 million during the same timeframe. While both reported and adjusted assets grew, the gap between reported and adjusted asset values suggests a significant portion of assets are related to goodwill or intangible items.

Shareholders' Equity

The reported total shareholders’ equity experienced continuous growth, advancing from US$9,966 million in 2017 to US$14,877 million in 2021. This increase indicates strengthening equity capital over the period. In contrast, the adjusted total shareholders’ equity displayed more volatility and a less consistent trend. After a gradual rise from US$2,798 million in 2017 to US$3,738 million in 2019, there was a pronounced decline to US$306 million in 2020, followed by a partial recovery to US$1,959 million in 2021. This fluctuation highlights significant adjustments affecting equity, potentially due to impairments, write-downs, or other non-recurring items impacting the adjusted equity base.

Comparative Insights

Overall, the data suggests that while the company’s reported financial position strengthened steadily in terms of both assets and equity, the adjusted figures reveal underlying volatility and adjustments primarily affecting equity. The substantial difference between reported and adjusted metrics underscores the impact of goodwill and similar intangible assets on the company’s balance sheet. The sharp dip in adjusted shareholders’ equity in 2020 is particularly notable and may warrant further investigation to understand the drivers behind this temporary but significant decrease.

Total Asset Turnover

The reported total asset turnover exhibited a declining trend from 0.56 in 2017 to a low of 0.42 in 2020, before partially recovering to 0.49 in 2021. The adjusted total asset turnover followed a similar pattern but remained consistently higher than the reported figures. It declined from 0.83 in 2017 to 0.67 in 2020, then improved to 0.79 in 2021. This suggests that when adjustments are made, likely related to goodwill, the efficiency in using assets to generate sales appears stronger than initially reported, despite a dip during the mid-period.

Financial Leverage

The reported financial leverage gradually increased from 2.23 in 2017 to a peak of 2.62 in 2020, then decreased to 2.33 in 2021. In contrast, the adjusted financial leverage demonstrates significant volatility, with values escalating from 5.37 in 2017 to an extraordinary 70.43 in 2020, then dropping sharply to 11.08 in 2021. This wide fluctuation in adjusted leverage points to substantial changes in the capital structure or adjustments in the asset base, particularly around 2020, which might be attributable to the treatment of goodwill or other intangible assets.

Return on Equity (ROE)

The reported ROE fluctuated considerably, rising sharply from 10.23% in 2017 to 30.29% in 2018, then declining to 16.26% in 2019 and further decreasing to 12.22% in 2020, with a slight recovery to 13.4% in 2021. Adjusted ROE values are notably higher and show extreme volatility, surging from 36.45% in 2017 to 112.19% in 2018, dipping to 55.72% in 2019, then spiking dramatically to 522.55% in 2020 before falling back to 101.79% in 2021. This suggests that adjustments, including those related to goodwill, significantly affect equity returns, and the extreme peak in 2020 indicates an exceptional event or accounting adjustment affecting equity performance metrics.

Return on Assets (ROA)

The reported ROA follows a trajectory similar to ROE but with lower numerical values, beginning at 4.6% in 2017, peaking at 13.05% in 2018, declining to 6.9% in 2019 and 4.66% in 2020, then rising to 5.76% in 2021. Adjusted ROA also exceeds reported values consistently, with a rise from 6.79% in 2017 to 19.03% in 2018, then dropping to 9.87% in 2019, 7.42% in 2020, and increasing again to 9.18% in 2021. The adjustments suggest enhanced asset utilization efficiency, although the same volatility and peak pattern around 2018 and 2020 are present as observed in other metrics.

Reported Total Assets

The reported total assets show a consistent upward trend over the five-year period, increasing from 22,197 million US dollars in 2017 to 34,631 million US dollars in 2021. This represents a significant growth in the asset base, with the most notable increments occurring between 2017 and 2018, and between 2019 and 2020.

Adjusted Total Assets

The adjusted total assets, which presumably exclude goodwill or other intangible assets, also increase steadily from 15,029 million US dollars in 2017 to 21,713 million US dollars in 2021. Although the growth is less pronounced than in reported total assets, the adjusted figure illustrates a strong, consistent expansion in tangible asset holdings.

Reported Total Asset Turnover

The reported total asset turnover ratio declines from 0.56 in 2017 to a low of 0.42 in 2020, before recovering to 0.49 in 2021. This downward trend until 2020 suggests a decreasing efficiency in generating revenue from the asset base, possibly due to rapid asset growth outpacing revenue increases. The improvement in 2021 indicates some recovery in asset utilization efficiency.

Adjusted Total Asset Turnover

The adjusted total asset turnover shows a similar but less pronounced declining trend from 0.83 in 2017 to 0.67 in 2020, then improves to 0.79 in 2021. These ratios are consistently higher than the reported counterparts, implying that excluding goodwill shows a more efficient use of tangible assets. The improvement in 2021 suggests a partial reversal of declining asset efficiency.

The financial data exhibits notable trends in both reported and goodwill adjusted figures over the five-year period examined.

Total Assets

The reported total assets increase steadily from US$22,197 million in 2017 to US$34,631 million in 2021, reflecting consistent asset growth. Adjusted total assets, excluding goodwill, also show an upward trend but at a generally lower scale, rising from US$15,029 million to US$21,713 million during the same period. The growth in adjusted assets appears more moderate in recent years, with a noticeable slowdown between 2020 and 2021.

Shareholders’ Equity

Reported total shareholders’ equity grows from US$9,966 million in 2017 to US$14,877 million in 2021, indicating a robust increase in equity financing or retained earnings. Conversely, adjusted shareholders’ equity, which removes the impact of goodwill, fluctuates more significantly. It increases from US$2,798 million in 2017 to US$3,738 million in 2019, then sharply decreases to US$306 million in 2020 before partially recovering to US$1,959 million in 2021. This volatility suggests considerable changes in goodwill or impairment adjustments impacting the equity base.

Financial Leverage

Reported financial leverage ratios remain relatively stable, ranging from 2.23 to 2.62 over the period, with a peak in 2020 followed by a reduction in 2021. This indicates a consistent capital structure with moderate use of debt relative to equity on a reported basis. However, adjusted financial leverage presents striking variability, particularly an extreme increase to 70.43 in 2020, before decreasing to 11.08 in 2021. The unusually high leverage in 2020 under the adjusted calculation likely reflects the very low adjusted equity base in that year, highlighting possible goodwill impairments or write-downs that temporarily magnified leverage metrics.

Overall, the trends suggest that while the company’s asset base and reported equity have grown steadily, adjustments related to goodwill have introduced significant volatility in measures of adjusted equity and leverage. The pronounced spike in adjusted financial leverage in 2020 merits further investigation into goodwill impairments or accounting reclassifications during that period. The recovery in adjusted equity and leverage in 2021 indicates some normalization following these fluctuations.

Reported total Stryker shareholders’ equity

The reported total shareholders’ equity increased steadily from 9,966 million US dollars in 2017 to 14,877 million US dollars in 2021, reflecting continuous growth over the five-year period. The annual increments range from moderate to strong, with the largest year-over-year increase between 2020 and 2021.

Adjusted total Stryker shareholders’ equity

The adjusted shareholders’ equity, which presumably excludes goodwill impacts, shows more volatility compared to the reported figures. It rose from 2,798 million US dollars in 2017 to a peak of 3,738 million in 2019 but then dramatically declined to 306 million in 2020 before partially recovering to 1,959 million in 2021. This fluctuation suggests significant adjustments related to goodwill impairments or revaluations during this period.

Reported Return on Equity (ROE)

The reported ROE experienced significant variations over the period. Starting at 10.23% in 2017, it surged sharply to 30.29% in 2018, nearly tripling the initial figure. Subsequently, it declined in the following years to 16.26% in 2019, 12.22% in 2020, and slightly increased again to 13.4% in 2021. This pattern indicates that while profitability relative to shareholders’ equity remains positive, it became less efficient after the 2018 peak.

Adjusted Return on Equity (ROE)

The adjusted ROE demonstrates extreme volatility and high values relative to the reported ROE. Starting at 36.45% in 2017, it more than tripled to 112.19% in 2018 and then decreased to 55.72% in 2019. A striking spike is seen in 2020 with an astronomical figure of 522.55%, followed by a decline to 101.79% in 2021. These abnormally high values are predominantly driven by the dramatic drop in adjusted shareholders' equity, especially in 2020, which significantly magnified the ROE ratios. This suggests that adjustments excluding goodwill have a profound impact on the equity base, causing inflated returns on a much smaller equity denominator.

Overall Insights

The reported data depicts a company with steady growth in equity and a fluctuating but generally positive ROE. The adjusted data, reflecting goodwill adjustments, reveals considerable instability in equity and returns, highlighting the significant effects of accounting treatments related to intangible assets. Careful consideration is required when interpreting adjusted ROE figures due to the magnitude of fluctuations driven by these adjustments.

Total Assets

The reported total assets exhibit a consistent upward trend over the five-year period, increasing from 22,197 million US dollars in 2017 to 34,631 million US dollars in 2021. This represents a significant growth in the company's asset base, with the most notable increase occurring between 2019 and 2020. Similarly, the adjusted total assets, which likely exclude goodwill or intangible assets, also show a steady rise from 15,029 million US dollars in 2017 to 21,713 million US dollars in 2021. Although the adjusted asset figures grow each year, their increase is more moderate compared to the reported total assets, indicating the impact of goodwill on the overall asset valuation.

Return on Assets (ROA)

The reported ROA fluctuates considerably over the observed period. Starting at 4.6% in 2017, it peaks at 13.05% in 2018, followed by a decline to 6.9% in 2019, further decreasing to 4.66% in 2020, and then slightly recovering to 5.76% in 2021. This volatility could suggest varying profitability or efficiency in asset utilization year to year. In contrast, the adjusted ROA, which is calculated based on adjusted total assets, shows a higher and more resilient trend. It commences at 6.79% in 2017, rises sharply to 19.03% in 2018, then declines over the next three years but remains above the reported ROA for the corresponding periods, ending at 9.18% in 2021. The higher adjusted ROA figures imply that when the impact of goodwill is excluded, the company demonstrates stronger asset profitability, and despite decreases after 2018, the adjusted ROA remains relatively robust.

Overall Insights

The data reveals a consistent increase in asset values both reported and adjusted, indicating ongoing asset accumulation or acquisition. The disparity between reported and adjusted values underscores the substantial presence of goodwill or intangible assets in total assets. The ROA metrics show differing profiles; the reported ROA is more volatile and generally lower than the adjusted ROA, suggesting that goodwill may dilute profitability measures. The adjusted ROA's higher values signal that the core operating assets generate better returns than what the reported metrics might initially indicate. The peak in 2018 across all measures followed by a subsequent decline suggests a temporal event or change affecting performance or asset quality during or after 2018.