Paramount Global (NASDAQ:PARA)

Goodwill

Goodwill exhibited a notable increase from 4,920 million USD in 2018 to 16,980 million USD in 2019, followed by a slight decline and stabilization, reaching 16,499 million USD by 2022. This suggests a significant acquisition or revaluation in 2019, with subsequent minor adjustments or impairments in later years.

Trade Names

Trade names increased substantially from 189 million USD in 2018 to 404 million USD in 2019, then decreased to 252 million USD by 2022. This pattern indicates an initial recognition or acquisition spike followed by gradual amortization or revaluation downwards.

Licenses

Licenses, noted from 2019 onwards, showed a declining trend from 159 million USD in 2019 to 128 million USD in 2022, indicating either amortization or disposals affecting this asset category.

Customer Agreements

Customer agreements have remained relatively stable, increasing slightly from 119 million USD in 2019 to a peak of 124 million USD in 2021 before a minor decrease to 123 million USD in 2022, reflecting minimal changes in this intangible asset.

Other Intangible Assets

Other intangible assets increased sharply from 49 million USD in 2018 to 263 million USD in 2019, then gradually declined over the following years to 234 million USD in 2022, hinting at initial additions followed by steady amortization or impairment.

Intangible Assets Subject to Amortization, Gross

This category rose significantly from 238 million USD in 2018 to 945 million USD in 2019, then trended downward to 737 million USD by 2022, consistent with the pattern in other intangibles subject to amortization, highlighting initial asset recognition and subsequent amortization.

Accumulated Amortization

Accumulated amortization increased steadily in magnitude (more negative) from -86 million USD in 2018 to -490 million USD in 2022, reflecting the ongoing amortization expense related to intangible assets.

Intangible Assets Subject to Amortization, Net

The net value of intangible assets subject to amortization peaked at 493 million USD in 2019 but then decreased consistently to 247 million USD in 2022, indicating wear down of the asset base through amortization exceeding new additions.

FCC Licenses

FCC licenses remained relatively stable, with a slight decrease from 2,441 million USD in 2018 and 2019 to 2,389 million USD in 2022, indicating minor reductions or impairments.

International Broadcast Licenses

These licenses fluctuated modestly around low values, starting at 45 million USD in 2018, decreasing to 24 million USD in 2022, suggesting gradual amortization or disposals.

Other Intangible Assets

Another category of other intangible assets recorded a stable figure of 34 million USD from 2019 through 2022, with no changes noted, implying no significant activity in this subcategory during that period.

Total Intangible Assets

Total intangible assets showed a moderate rise from 2,638 million USD in 2018 to 2,993 million USD in 2019, followed by a steady decline to 2,694 million USD in 2022, suggesting overall asset amortization and reductions slightly exceeding any new additions.

Goodwill and Other Intangible Assets Combined

This combined total rose sharply from 7,558 million USD in 2018 to nearly 20,000 million USD in 2019, then gradually decreased each year to 19,193 million USD in 2022. The significant jump in 2019 aligns with events such as acquisitions, followed by marginal amortization or impairments within the following years.

The financial data reveals notable trends in both reported and goodwill-adjusted figures over the period from 2018 to 2022.

Total Assets

Reported total assets showed a significant increase from US$21,859 million in 2018 to a peak of US$58,620 million in 2021, followed by a slight decline to US$58,393 million in 2022. The adjusted total assets, which exclude goodwill, exhibited a similar upward trajectory, rising from US$16,939 million in 2018 to US$42,036 million in 2021, then slightly decreasing to US$41,894 million in 2022. This pattern suggests substantial asset growth over the period, with a leveling off near the end.

Stockholders' Equity

Reported total Paramount stockholders’ equity increased markedly from US$2,804 million in 2018 to US$23,036 million in 2022, demonstrating strong growth in equity over the five-year span. The adjusted total stockholders’ equity displayed a contrasting trend, starting with negative values of -US$2,116 million in 2018 and reaching a more positive figure of US$6,537 million in 2022. The trend from negative to positive adjusted equity indicates improvements after adjustments, suggesting reductions in intangible assets such as goodwill or other write-downs being accounted for, which enhance the underlying equity position.

Overall Insights

The difference between reported and adjusted figures highlights the impact of goodwill and other intangible assets on the balance sheet. The upward trend in reported assets and equity aligns with potential acquisitions or asset growth. However, adjusted figures present a more conservative view, reflecting the underlying asset base and equity less affected by intangible asset valuations. The shift toward positive adjusted equity in recent years is indicative of improved financial health when excluding goodwill, possibly reflecting operational improvements or asset impairments being resolved.

Total Asset Turnover

Reported total asset turnover shows a declining trend from 0.66 in 2018 to a low of 0.48 in 2020, followed by a gradual recovery reaching 0.52 in 2022. The adjusted total asset turnover, which factors in goodwill adjustments, remains consistently higher than the reported figures, starting at 0.86 in 2018, slightly declining to 0.7 in 2020, and then modestly rebounding to 0.72 by 2022. This indicates that when adjusting for goodwill, asset utilization exhibits better performance, although it also reflects some weakening during the 2019-2021 period.

Financial Leverage

Reported financial leverage decreases markedly from 7.8 in 2018 to 2.53 in 2022, indicating a significant reduction in the company’s dependency on debt relative to equity over this period. The adjusted financial leverage data is only available for 2021 and 2022 and shows relatively high levels of 7.23 and 6.41 respectively, suggesting that when adjustments for goodwill are made, the company's leverage appears substantially higher than reported figures, though a downward trend is still observable.

Return on Equity (ROE)

Reported ROE experiences a strong decline over the examined timeframe, plummeting from a high of 69.9% in 2018 to 4.79% in 2022. This sharp drop indicates a substantial erosion in shareholder profitability. Adjusted ROE, available only for 2021 and 2022, is significantly greater than reported ROE for these years, standing at 78.09% in 2021 before falling to 16.89% in 2022, which suggests that goodwill adjustments reveal notably higher returns in 2021 but also a steep decrease thereafter.

Return on Assets (ROA)

Reported ROA also declines from 8.97% in 2018 to 1.89% in 2022, reflecting a weakening in the company's ability to generate profit from its asset base. Adjusted ROA figures consistently exceed reported ones across the available years, beginning at 11.57% in 2018, dipping to 6.72% in 2020, and then slightly recovering to 2.64% in 2022. This pattern suggests that without the goodwill impact, asset profitability remains stronger despite a general decreasing trend.

The financial data reveals notable trends in both reported and goodwill adjusted measures over the five-year period.

Total Assets

The reported total assets demonstrate a significant increase from 21,859 million US dollars in 2018 to a peak of 58,620 million in 2021, followed by a minor decline to 58,393 million in 2022. The adjusted total assets, which exclude goodwill, also show a consistent upward trend, rising from 16,939 million in 2018 to 42,036 million in 2021, with a slight decrease to 41,894 million in 2022. The increase in assets indicates substantial growth in the asset base until 2021, after which it stabilizes.

Total Asset Turnover

The reported total asset turnover ratio declines from 0.66 in 2018 to 0.48 in 2020, indicating a decreasing efficiency in using assets to generate revenue during this period. A slight recovery is observed in 2021 and 2022, with ratios increasing to 0.49 and 0.52 respectively, although still below the 2018 level. The adjusted total asset turnover similarly shows a decline from 0.86 in 2018 to 0.7 in 2020, followed by a further decrease to 0.68 in 2021, and a modest rebound to 0.72 in 2022. Despite fluctuations, the adjusted ratios consistently remain higher than the reported figures, suggesting the exclusion of goodwill improves the assessment of operational efficiency.

Overall, the data indicates that while the total asset base has expanded considerably over the timeframe, the efficiency with which these assets are utilized to generate turnover has generally diminished, with some signs of improvement in the most recent years. The adjusted figures provide a more favorable view of asset turnover, underscoring the impact of goodwill on reported metrics.

The data reflects distinct trends in the reported and goodwill adjusted financial figures over the five-year period.

Total Assets

Reported total assets displayed a consistent upward trajectory from 21,859 million US dollars in 2018 to a peak of 58,620 million US dollars in 2021, followed by a marginal decrease to 58,393 million in 2022. Similarly, adjusted total assets, excluding goodwill, increased steadily from 16,939 million US dollars in 2018 to 42,036 million in 2021, with a slight reduction to 41,894 million in 2022. The growth in assets indicates ongoing expansion, although the slight decline in the last observed year suggests stabilization or minor contraction.

Stockholders’ Equity

Reported total Paramount stockholders’ equity showed significant growth, rising from 2,804 million US dollars in 2018 to 23,036 million in 2022, with notably large increments in 2019 and 2021. Conversely, adjusted equity, which accounts for goodwill removal, was negative in 2018, 2019, and 2020, highlighting potential overstatement of equity values due to goodwill on the balance sheet. The adjusted equity turned positive beginning 2021 with 5,818 million US dollars and further increased to 6,537 million in 2022, indicating an improvement in the core equity position after adjustments.

Financial Leverage

The reported financial leverage ratio, defined as total assets divided by stockholders’ equity, declined consistently from a high of 7.8 times in 2018 to 2.53 times in 2022. This decreasing leverage suggests reduced reliance on debt financing relative to equity over time and a strengthening equity base. Adjusted financial leverage was available only for 2021 and 2022, showing high levels of 7.23 and 6.41 times respectively. These higher adjusted leverage ratios imply that when excluding goodwill, the company is more leveraged, consistent with the earlier negative adjusted equity values.

Overall, the company demonstrates asset growth and an improving equity position based on reported figures. However, adjustments removing goodwill reveal a more conservative financial structure, with previously negative equity turning positive recently and elevated leverage persistently evident. These insights point to significant intangible assets on the balance sheet and a cautious view of financial stability when goodwill is excluded.

The analysis of the annual financial data reveals several notable trends in the reported and goodwill-adjusted figures over the five-year period.

Stockholders’ Equity Trends

The reported total stockholders’ equity exhibits a substantial increase from 2,804 million US dollars at the end of 2018 to 23,036 million US dollars by the end of 2022. This growth is particularly pronounced between 2018 and 2019, where equity surged drastically from 2,804 to 13,207 million dollars, and continued to rise steadily through 2021 and 2022. In contrast, the adjusted total stockholders’ equity, which appears to exclude goodwill, starts in negative territory at -2,116 million dollars in 2018 and worsens to -3,773 million dollars in 2019. It then improves substantially, becoming less negative in 2020 (-1,241 million dollars) and turning positive in 2021 (5,818 million dollars) and 2022 (6,537 million dollars). This pattern indicates that goodwill adjustments have a significant impact on the equity figures, with major impairments or write-downs possibly reflected in earlier years and recoveries or revaluations in later periods.

Return on Equity (ROE) Analysis

The reported ROE shows a sharp decline over the period, starting from an exceptionally high 69.9% in 2018, falling to 25.05% in 2019, and continuing a downward trend to 15.76% in 2020. There is a moderate rebound in 2021 to 20.28%, but this is followed by a steep drop to 4.79% in 2022. This signifies a considerable reduction in generating profits relative to reported equity. Adjusted ROE data is incomplete for the early years but indicates an extremely high 78.09% in 2021, followed by a significant decrease to 16.89% in 2022. The adjusted ROE being higher than the reported ROE in 2021 suggests that when goodwill is excluded, the company’s profitability relative to adjusted equity was stronger in that year; however, the decline in 2022 aligns with the trend observed in the reported figures.

Total Assets

Reported total assets demonstrated substantial growth from 21,859 million in 2018 to a peak of 58,620 million in 2021, followed by a slight decline to 58,393 million in 2022. The adjusted total assets, which exclude goodwill, followed a similar upward trajectory but at comparatively lower levels, increasing from 16,939 million in 2018 to 42,036 million in 2021, and then slightly decreasing to 41,894 million in 2022. The difference between reported and adjusted assets indicates the presence and variation of goodwill over the years.

Return on Assets (ROA)

The reported ROA showed a declining trend overall, starting at 8.97% in 2018 and dropping to 1.89% in 2022. Despite an uptick in 2021 to 7.75%, the general direction is downward. The adjusted ROA, which accounts for total assets excluding goodwill, also exhibited a decreased trend, though generally higher than the reported ROA. It fell from 11.57% in 2018 to 2.64% in 2022, with a slight recovery in 2021 where it reached 10.81%. The gap between reported and adjusted ROA suggests that goodwill impacts reported profitability ratios, and the decline indicates diminishing asset profitability over time.