Stock Analysis on Net

Waste Management Inc. (NYSE:WM)

This company has been moved to the archive! The financial data has not been updated since February 15, 2022.

Analysis of Operating Leases

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An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.


Adjustments to Financial Statements for Operating Leases

Waste Management Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Adjustment to Total Assets
Total assets (as reported) 29,097 29,345 27,743 22,650 21,829
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1 492 485
Total assets (adjusted) 29,097 29,345 27,743 23,142 22,314
Adjustment to Total Debt
Total debt (as reported) 13,405 13,810 13,498 10,026 9,491
Add: Operating lease liability (before adoption of FASB Topic 842)2 492 485
Add: Current operating lease liabilities (classified in Accrued liabilities) 64 63 79
Add: Long-term operating lease liabilities (classified in Other liabilities) 459 453 366
Total debt (adjusted) 13,928 14,326 13,943 10,518 9,976

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1, 2 Equal to total present value of future operating lease payments.


Waste Management Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios for Operating Leases (Summary)

Waste Management Inc., adjusted financial ratios

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Total Asset Turnover1
Reported total asset turnover 0.62 0.52 0.56 0.66 0.66
Adjusted total asset turnover 0.62 0.52 0.56 0.64 0.65
Debt to Equity2
Reported debt to equity 1.88 1.85 1.91 1.60 1.58
Adjusted debt to equity 1.96 1.92 1.97 1.68 1.66
Return on Assets3 (ROA)
Reported ROA 6.24% 5.10% 6.02% 8.50% 8.93%
Adjusted ROA 6.24% 5.10% 6.02% 8.32% 8.73%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Waste Management Inc. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Waste Management Inc. adjusted debt to equity ratio improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021 not reaching 2019 level.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Waste Management Inc. adjusted ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Waste Management Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Operating revenues 17,931 15,218 15,455 14,914 14,485
Total assets 29,097 29,345 27,743 22,650 21,829
Activity Ratio
Total asset turnover1 0.62 0.52 0.56 0.66 0.66
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Operating revenues 17,931 15,218 15,455 14,914 14,485
Adjusted total assets 29,097 29,345 27,743 23,142 22,314
Activity Ratio
Adjusted total asset turnover2 0.62 0.52 0.56 0.64 0.65

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Total asset turnover = Operating revenues ÷ Total assets
= 17,931 ÷ 29,097 = 0.62

2 Adjusted total asset turnover = Operating revenues ÷ Adjusted total assets
= 17,931 ÷ 29,097 = 0.62

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Waste Management Inc. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Adjusted Debt to Equity

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Total debt 13,405 13,810 13,498 10,026 9,491
Total Waste Management, Inc. stockholders’ equity 7,124 7,452 7,068 6,275 6,019
Solvency Ratio
Debt to equity1 1.88 1.85 1.91 1.60 1.58
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 13,928 14,326 13,943 10,518 9,976
Total Waste Management, Inc. stockholders’ equity 7,124 7,452 7,068 6,275 6,019
Solvency Ratio
Adjusted debt to equity2 1.96 1.92 1.97 1.68 1.66

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Debt to equity = Total debt ÷ Total Waste Management, Inc. stockholders’ equity
= 13,405 ÷ 7,124 = 1.88

2 Adjusted debt to equity = Adjusted total debt ÷ Total Waste Management, Inc. stockholders’ equity
= 13,928 ÷ 7,124 = 1.96

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Waste Management Inc. adjusted debt-to-equity ratio improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021 not reaching 2019 level.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Waste Management, Inc. 1,816 1,496 1,670 1,925 1,949
Total assets 29,097 29,345 27,743 22,650 21,829
Profitability Ratio
ROA1 6.24% 5.10% 6.02% 8.50% 8.93%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income attributable to Waste Management, Inc. 1,816 1,496 1,670 1,925 1,949
Adjusted total assets 29,097 29,345 27,743 23,142 22,314
Profitability Ratio
Adjusted ROA2 6.24% 5.10% 6.02% 8.32% 8.73%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 ROA = 100 × Net income attributable to Waste Management, Inc. ÷ Total assets
= 100 × 1,816 ÷ 29,097 = 6.24%

2 Adjusted ROA = 100 × Net income attributable to Waste Management, Inc. ÷ Adjusted total assets
= 100 × 1,816 ÷ 29,097 = 6.24%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Waste Management Inc. adjusted ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.