Valero Energy Corp. (NYSE:VLO)

The data indicates that the value of goodwill remained constant at 260 million US dollars throughout the five-year period ending in 2023. This stability suggests no impairment or revaluation adjustments to goodwill during this time frame.

In contrast, intangible assets, net, showed a consistent downward trend over the same period. Starting from 283 million US dollars at the end of 2019, intangible assets decreased each year to reach 183 million US dollars by the end of 2023. This decline may reflect amortization, disposals, or write-downs affecting the intangible asset base.

The combined figure for goodwill and intangible assets also mirrors this decreasing trend, moving from 543 million US dollars in 2019 down to 443 million US dollars in 2023. The reduction is primarily driven by the decline in intangible assets since goodwill remained unchanged. Overall, the amortization or impairment of intangible assets appears to be a significant factor influencing the total values in this asset category.

Goodwill

Remained stable at 260 million US dollars throughout 2019 to 2023.

Intangible Assets, Net

Consistently decreased from 283 million to 183 million US dollars, indicating asset amortization or disposals.

Goodwill and Intangible Assets Total

Declined from 543 million to 443 million US dollars, reflecting the reduction in net intangible assets with stable goodwill.

The data reveals the financial position of the company over a five-year period, focusing on total assets and stockholders' equity, both reported and adjusted for goodwill.

Total assets

Reported total assets experienced a decline from 53,864 million USD in 2019 to 51,774 million USD in 2020. Subsequently, there was a steady increase through 2021 to 2023, reaching 63,056 million USD by the end of 2023. The adjusted total assets followed a very similar trend, with a slight difference in values, starting at 53,604 million USD in 2019, decreasing in 2020, and rising consistently to 62,796 million USD by 2023. The overall pattern indicates recovery and growth in asset base after an initial contraction in 2020.

Stockholders’ equity

Reported stockholders’ equity shows a decrease from 21,803 million USD in 2019 to 18,801 million USD in 2020, continuing to decline marginally to 18,430 million USD in 2021. However, there is a notable rebound in equity in subsequent years, rising to 23,561 million USD in 2022 and further to 26,346 million USD in 2023. The adjusted equity figures closely mirror this pattern, starting at 21,543 million USD in 2019, decreasing in 2020 and 2021, and then recovering to 26,086 million USD by 2023. This suggests a strengthening financial position reflected in shareholders’ equity after a period of decline.

In summary, both total assets and stockholders’ equity declined sharply in 2020, likely reflecting challenging conditions during that period. Following this, there is a clear trend of recovery and growth in the subsequent three years, with values as of 2023 exceeding those at the start of the period. The adjustment for goodwill does not materially alter the trends observed, indicating that goodwill valuation changes have a limited impact on the overall asset and equity values reported.

Total Asset Turnover

The total asset turnover ratios, both reported and adjusted for goodwill, show a decline from 2019 to 2020, dropping from approximately 2.01 to 1.25. This indicates a decrease in the efficiency of asset use during that period. However, a notable recovery is observed in 2021 and 2022, with turnovers rising sharply to near or above 2.9, suggesting improved asset utilization. In 2023, there is a slight reduction compared to 2022 but turnover levels remain significantly higher than those in 2020 and close to the 2019 levels.

Financial Leverage

Financial leverage ratios exhibit an upward trend from 2019 to 2021, increasing from about 2.47 to over 3.14 reported and adjusted metrics, implying greater reliance on debt financing or higher asset to equity ratios. This peak is followed by a decline in 2022 and a further decrease in 2023, down to around 2.59 and 2.39 respectively for reported measures. The adjusted figures reflect a similar pattern but slightly higher values throughout, indicating a consistent adjustment effect on leverage assessment.

Return on Equity (ROE)

Returns on equity demonstrate significant volatility over the five-year span. There is a positive ROE in 2019 around 11%, followed by a sharp downturn into negative territory in 2020 near -7.6%, indicating a challenging year likely affecting profitability. The profit situation improves modestly by 2021 but remains low at about 5%. Then, there is a strong surge in 2022 with ROE reaching nearly 49%, and it remains elevated in 2023 above 33%. The adjusted ROE metrics closely mirror these trends but are marginally higher, suggesting a slight impact of goodwill adjustments on profitability measures.

Return on Assets (ROA)

ROA ratios also display a pattern of decline and recovery similar to ROE but with lower absolute percentage values. Initially positive around 4.5% in 2019, ROA falls to negative values near -2.7% in 2020, reflecting reduced asset profitability. Recovery is gradual, with small positive returns in 2021 around 1.6%, followed by a sharp increase to approximately 19% in 2022. In 2023, ROA decreases to roughly 14%, which still represents a strong performance compared to earlier years. The adjusted ROA figures are nearly identical to the reported values, implying minimal impact of goodwill adjustments on asset returns.

Summary Insights

The data reflect a period of operational and financial challenges around 2020, as seen in declines across efficiency, leverage, and profitability metrics. Subsequently, strong recovery is evident from 2021 through 2022, characterized by improved asset utilization, reduced leverage, and significantly enhanced profitability. Despite a moderate dip in 2023, the company maintains better efficiency and returns compared to the low point in 2020. Adjustments for goodwill have a minor effect on the reported metrics but consistently indicate slightly higher efficiency and profitability ratios.

Total Assets

The reported total assets exhibited an initial decline from 53,864 million USD in 2019 to 51,774 million USD in 2020, followed by a consistent increase in subsequent years, reaching 63,056 million USD by the end of 2023. Similarly, adjusted total assets mirrored this trend, decreasing from 53,604 million USD in 2019 to 51,514 million USD in 2020, then steadily rising to 62,796 million USD in 2023. This pattern suggests a recovery and growth phase after an initial contraction in 2020.

Total Asset Turnover Ratios

The reported total asset turnover ratio experienced a significant drop from 2.01 in 2019 to 1.25 in 2020, indicating reduced efficiency in asset utilization during that period. However, a strong rebound was observed in 2021, reaching 1.97, and this upward momentum continued into 2022, peaking at 2.89. There was a moderate decrease in 2023 to 2.3, though the ratio remained well above pre-2020 levels. The adjusted total asset turnover ratios followed a nearly identical trajectory, confirming the robustness of the operational efficiency improvements independent of goodwill adjustments.

Insights and Patterns

The initial contraction in asset base and downturn in asset turnover ratios in 2020 likely reflect external challenges impacting operational capacity or market conditions. The subsequent and sustained increase in total assets indicates strategic asset growth or reinvestment, while the recovery and overshoot in asset turnover ratios suggest enhanced operational efficiency and better asset utilization. The slight decline in turnover ratios in 2023 could signal normalization or stabilization after peak efficiency gains.

The analysis of the financial data reveals several notable trends across the examined periods.

Total Assets

Reported total assets display a generally increasing trajectory, beginning at US$53,864 million in 2019, experiencing a slight decline in 2020 to US$51,774 million, then rising steadily through 2023 to reach US$63,056 million. The goodwill-adjusted total assets follow a very similar pattern, maintaining values marginally below the reported figures throughout the periods.

Stockholders’ Equity

The reported total stockholders’ equity shows a decline from US$21,803 million in 2019 to US$18,430 million by the end of 2021, indicating a weakening in equity during this initial period. From 2021 to 2023, equity recovered substantially, increasing to US$26,346 million. The adjusted equity figures mirror this behavior closely, with slightly lower values due to the goodwill adjustments, indicating consistent equity dynamics regardless of adjustments.

Financial Leverage

Financial leverage, both reported and adjusted, exhibits an increasing trend from 2019 (2.47 and 2.49 respectively) peaking notably in 2021 (3.14 reported and 3.17 adjusted), which suggests a higher degree of debt reliance or lower equity base during this period. Subsequent years see a marked decline in leverage ratios, reaching their lowest levels in 2023 (2.39 reported, 2.41 adjusted), indicating an improvement in the capital structure, potentially via debt reduction or equity strengthening.

General Observations

The consistency between reported and adjusted figures confirms that goodwill adjustments have a limited impact on the overall asset, equity, and leverage values, suggesting goodwill does not constitute a large portion of total assets. The initial downturn in equity and spike in leverage around 2020-2021 may reflect external pressures or company-specific challenges, while the subsequent recovery and improvement in leverage ratios indicate a strengthening financial position and possibly better risk management or operational performance in recent years.

Over the five-year period under review, total stockholders’ equity, both reported and goodwill adjusted, exhibits a generally increasing trend with some fluctuations. Initially, from 2019 to 2020, there is a decline in equity, with reported equity decreasing from 21,803 million US dollars to 18,801 million US dollars, and adjusted equity showing a similar decline from 21,543 million to 18,541 million US dollars. This reduction suggests some financial pressures or losses experienced during this timeframe.

From 2020 through 2021, the equity remains relatively stable but continues to show a slight decline. Reported total equity decreases marginally from 18,801 to 18,430 million US dollars, and adjusted equity moves from 18,541 to 18,170 million US dollars. This could indicate a period of subdued growth or challenges in capital accumulation.

Significant recovery and growth are observed from 2021 to 2023. Reported stockholders’ equity rises markedly from 18,430 million to 26,346 million US dollars by 2023, and adjusted equity shows a similar increase from 18,170 million to 26,086 million US dollars. This upward movement suggests strong capital strengthening, potentially from profitable operations or capital infusions during these years.

The return on equity (ROE) metrics also reflect volatile performance over the period. Both reported and adjusted ROE turn negative in 2020, recording approximately -7.56% and -7.66% respectively, indicative of a loss or diminishing profitability during that year. In 2021, ROE recovers modestly to around 5%, showing a return to profitability, albeit at a moderate level.

A substantial improvement in profitability is noted in 2022, where ROE sharply increases to nearly 49% for reported and 49.5% for adjusted, representing a strong financial performance and highly efficient use of equity. Although ROE slightly decreases in 2023, it remains at an elevated level of around 33.5% reported and 33.9% adjusted, signifying sustained robust profitability.

The close alignment between reported and adjusted figures for both equity and ROE throughout the period indicates that goodwill adjustments have a relatively minor impact on overall equity and profitability assessments. This suggests that the company’s goodwill valuations do not materially distort the equity base or return metrics.

Overall, the data depicts an initial period of financial challenge followed by recovery and strong growth in equity and profitability in the most recent years, highlighting a positive trajectory in financial performance and shareholder value creation.

The analysis of the financial data over the five-year period reveals several notable trends and variations in asset values and return on assets (ROA) measurements, both reported and goodwill adjusted.

Total Assets

The reported total assets show a gradual increase from approximately US$53.9 billion in 2019 to US$63.1 billion in 2023. This represents a compound upward trend, with a minor dip observed in 2020, where assets decreased from US$53.9 billion to US$51.8 billion. After this, the asset base expanded steadily year-over-year, indicating sustained growth or acquisitions that enhanced asset holdings.

The adjusted total assets, which exclude goodwill effects, closely parallel the reported figures but are slightly lower in each year. This consistency suggests that goodwill adjustments have a relatively small impact on the overall asset base, maintaining a nearly identical upward trajectory in assets from about US$53.6 billion in 2019 to US$62.8 billion in 2023.

Return on Assets (ROA)

Reported ROA demonstrates considerable variability across the period. The ROA was positive at 4.5% in 2019 but declined sharply to a negative return of -2.74% in 2020. This downturn may reflect operational challenges or economic impacts, such as those resulting from broader market disruptions. Recovery is evident starting in 2021, where the ROA turned positive again at 1.61% and then experienced a significant surge in 2022, reaching 18.9%, before slightly decreasing to 14.01% in 2023. Overall, this pattern indicates volatility but with a strong recovery and profitability increase post-2020.

The adjusted ROA values closely mirror the reported ROA across all years, with minimal deviations. The adjusted ROA starts at 4.52% in 2019, drops to -2.76% in 2020, recovers to 1.61% in 2021, peaks at 18.98% in 2022, and then decreases to 14.07% in 2023. This similarity between reported and adjusted ROA figures reinforces the conclusion that goodwill adjustments have limited effect on the company’s operational profitability metrics over this period.

In summary, the data indicates a company experiencing a transient decline in asset base and profitability in 2020, followed by robust recovery and growth through 2023. The close alignment between reported and adjusted metrics suggests that goodwill does not materially distort the company's financial performance measures. The significant rebound in ROA after 2020 highlights improved operational efficiency or market conditions, resulting in enhanced returns on an expanding asset base.