Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Adobe Inc., balance sheet: goodwill and intangible assets

US$ in millions

	Nov 29, 2024	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019
Goodwill	12,788)	12,805)	12,787)	12,668)	10,742)	10,691)
Customer contracts and relationships	1,203)	1,204)	1,204)	1,213)	958)	1,219)
Purchased technology	877)	984)	1,060)	1,053)	756)	759)
Trademarks	372)	376)	375)	376)	384)	384)
Other	42)	22)	61)	60)	84)	227)
Other intangibles, gross carrying amount	2,494)	2,586)	2,700)	2,702)	2,182)	2,589)
Accumulated amortization	(1,712)	(1,498)	(1,251)	(882)	(823)	(869)
Other intangibles, net	782)	1,088)	1,449)	1,820)	1,359)	1,721)
Goodwill and other intangibles	13,570)	13,893)	14,236)	14,488)	12,101)	12,412)

Based on: 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29).

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Item	Description	The company
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Adobe Inc. goodwill increased from 2022 to 2023 but then slightly decreased from 2023 to 2024 not reaching 2022 level.
Other intangibles, net	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Adobe Inc. other intangibles, net decreased from 2022 to 2023 and from 2023 to 2024.
Goodwill and other intangibles	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Adobe Inc. goodwill and other intangibles decreased from 2022 to 2023 and from 2023 to 2024.

Adobe Inc., adjustments to financial statements

US$ in millions

	Nov 29, 2024	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019
Adjustment to Total Assets
Total assets (as reported)	30,230)	29,779)	27,165)	27,241)	24,284)	20,762)
Less: Goodwill	12,788)	12,805)	12,787)	12,668)	10,742)	10,691)
Total assets (adjusted)	17,442)	16,974)	14,378)	14,573)	13,542)	10,071)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	14,105)	16,518)	14,051)	14,797)	13,264)	10,530)
Less: Goodwill	12,788)	12,805)	12,787)	12,668)	10,742)	10,691)
Stockholders’ equity (adjusted)	1,317)	3,713)	1,264)	2,129)	2,522)	(161)

Based on: 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29).

Adobe Inc., Financial Data: Reported vs. Adjusted

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Adobe Inc., adjusted financial ratios

	Nov 29, 2024	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019
Total Asset Turnover
Reported total asset turnover	0.71	0.65	0.65	0.58	0.53	0.54
Adjusted total asset turnover	1.23	1.14	1.22	1.08	0.95	1.11
Financial Leverage
Reported financial leverage	2.14	1.80	1.93	1.84	1.83	1.97
Adjusted financial leverage	13.24	4.57	11.38	6.84	5.37	—
Return on Equity (ROE)
Reported ROE	39.42%	32.86%	33.85%	32.59%	39.66%	28.03%
Adjusted ROE	422.17%	146.19%	376.27%	226.49%	208.56%	—
Return on Assets (ROA)
Reported ROA	18.39%	18.23%	17.51%	17.70%	21.66%	14.22%
Adjusted ROA	31.88%	31.98%	33.08%	33.09%	38.84%	29.31%

Based on: 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Adobe Inc. adjusted total asset turnover ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Adobe Inc. adjusted financial leverage ratio decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Adobe Inc. adjusted ROE deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Adobe Inc. adjusted ROA deteriorated from 2022 to 2023 and from 2023 to 2024.

Adobe Inc., Financial Ratios: Reported vs. Adjusted

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	Nov 29, 2024	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019
As Reported
Selected Financial Data (US$ in millions)
Revenue	21,505)	19,409)	17,606)	15,785)	12,868)	11,171)
Total assets	30,230)	29,779)	27,165)	27,241)	24,284)	20,762)
Activity Ratio
Total asset turnover¹	0.71	0.65	0.65	0.58	0.53	0.54
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenue	21,505)	19,409)	17,606)	15,785)	12,868)	11,171)
Adjusted total assets	17,442)	16,974)	14,378)	14,573)	13,542)	10,071)
Activity Ratio
Adjusted total asset turnover²	1.23	1.14	1.22	1.08	0.95	1.11

Based on: 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29).

2024 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 21,505 ÷ 30,230 = 0.71

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 21,505 ÷ 17,442 = 1.23

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Adobe Inc. adjusted total asset turnover ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

	Nov 29, 2024	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets	30,230)	29,779)	27,165)	27,241)	24,284)	20,762)
Stockholders’ equity	14,105)	16,518)	14,051)	14,797)	13,264)	10,530)
Solvency Ratio
Financial leverage¹	2.14	1.80	1.93	1.84	1.83	1.97
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets	17,442)	16,974)	14,378)	14,573)	13,542)	10,071)
Adjusted stockholders’ equity	1,317)	3,713)	1,264)	2,129)	2,522)	(161)
Solvency Ratio
Adjusted financial leverage²	13.24	4.57	11.38	6.84	5.37	—

Based on: 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29).

2024 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 30,230 ÷ 14,105 = 2.14

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 17,442 ÷ 1,317 = 13.24

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Adobe Inc. adjusted financial leverage ratio decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

	Nov 29, 2024	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income	5,560)	5,428)	4,756)	4,822)	5,260)	2,951)
Stockholders’ equity	14,105)	16,518)	14,051)	14,797)	13,264)	10,530)
Profitability Ratio
ROE¹	39.42%	32.86%	33.85%	32.59%	39.66%	28.03%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income	5,560)	5,428)	4,756)	4,822)	5,260)	2,951)
Adjusted stockholders’ equity	1,317)	3,713)	1,264)	2,129)	2,522)	(161)
Profitability Ratio
Adjusted ROE²	422.17%	146.19%	376.27%	226.49%	208.56%	—

Based on: 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29).

2024 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 5,560 ÷ 14,105 = 39.42%

² Adjusted ROE = 100 × Net income ÷ Adjusted stockholders’ equity
= 100 × 5,560 ÷ 1,317 = 422.17%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Adobe Inc. adjusted ROE deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

	Nov 29, 2024	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income	5,560)	5,428)	4,756)	4,822)	5,260)	2,951)
Total assets	30,230)	29,779)	27,165)	27,241)	24,284)	20,762)
Profitability Ratio
ROA¹	18.39%	18.23%	17.51%	17.70%	21.66%	14.22%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income	5,560)	5,428)	4,756)	4,822)	5,260)	2,951)
Adjusted total assets	17,442)	16,974)	14,378)	14,573)	13,542)	10,071)
Profitability Ratio
Adjusted ROA²	31.88%	31.98%	33.08%	33.09%	38.84%	29.31%

Based on: 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29).

2024 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 5,560 ÷ 30,230 = 18.39%

² Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 5,560 ÷ 17,442 = 31.88%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Adobe Inc. adjusted ROA deteriorated from 2022 to 2023 and from 2023 to 2024.

Adobe Inc. (NASDAQ:ADBE)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Adobe Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Adobe Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)