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

	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019	Nov 30, 2018
Goodwill	12,805)	12,787)	12,668)	10,742)	10,691)	10,581)
Customer contracts and relationships	1,204)	1,204)	1,213)	958)	1,219)	1,329)
Purchased technology	984)	1,060)	1,053)	756)	759)	750)
Trademarks	376)	375)	376)	384)	384)	385)
Other	22)	61)	60)	84)	227)	257)
Other intangibles, gross carrying amount	2,586)	2,700)	2,702)	2,182)	2,589)	2,722)
Accumulated amortization	(1,498)	(1,251)	(882)	(823)	(869)	(653)
Other intangibles, net	1,088)	1,449)	1,820)	1,359)	1,721)	2,069)
Goodwill and other intangibles	13,893)	14,236)	14,488)	12,101)	12,412)	12,650)

Based on: 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), 10-K (reporting date: 2018-11-30).

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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 2021 to 2022 and from 2022 to 2023.
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 2021 to 2022 and from 2022 to 2023.
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 2021 to 2022 and from 2022 to 2023.

Adobe Inc., adjustments to financial statements

US$ in millions

	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019	Nov 30, 2018
Adjustment to Total Assets
Total assets (as reported)	29,779)	27,165)	27,241)	24,284)	20,762)	18,769)
Less: Goodwill	12,805)	12,787)	12,668)	10,742)	10,691)	10,581)
Total assets (adjusted)	16,974)	14,378)	14,573)	13,542)	10,071)	8,188)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	16,518)	14,051)	14,797)	13,264)	10,530)	9,362)
Less: Goodwill	12,805)	12,787)	12,668)	10,742)	10,691)	10,581)
Stockholders’ equity (adjusted)	3,713)	1,264)	2,129)	2,522)	(161)	(1,219)

Based on: 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), 10-K (reporting date: 2018-11-30).

Adobe Inc., Financial Data: Reported vs. Adjusted

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Adobe Inc., adjusted financial ratios

	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019	Nov 30, 2018
Total Asset Turnover
Reported total asset turnover	0.65	0.65	0.58	0.53	0.54	0.48
Adjusted total asset turnover	1.14	1.22	1.08	0.95	1.11	1.10
Financial Leverage
Reported financial leverage	1.80	1.93	1.84	1.83	1.97	2.00
Adjusted financial leverage	4.57	11.38	6.84	5.37	—	—
Return on Equity (ROE)
Reported ROE	32.86%	33.85%	32.59%	39.66%	28.03%	27.67%
Adjusted ROE	146.19%	376.27%	226.49%	208.56%	—	—
Return on Assets (ROA)
Reported ROA	18.23%	17.51%	17.70%	21.66%	14.22%	13.80%
Adjusted ROA	31.98%	33.08%	33.09%	38.84%	29.31%	31.64%

Based on: 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), 10-K (reporting date: 2018-11-30).

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 improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 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 increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Adobe Inc. adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Adobe Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.

Adobe Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019	Nov 30, 2018
As Reported
Selected Financial Data (US$ in millions)
Revenue	19,409)	17,606)	15,785)	12,868)	11,171)	9,030)
Total assets	29,779)	27,165)	27,241)	24,284)	20,762)	18,769)
Activity Ratio
Total asset turnover¹	0.65	0.65	0.58	0.53	0.54	0.48
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenue	19,409)	17,606)	15,785)	12,868)	11,171)	9,030)
Adjusted total assets	16,974)	14,378)	14,573)	13,542)	10,071)	8,188)
Activity Ratio
Adjusted total asset turnover²	1.14	1.22	1.08	0.95	1.11	1.10

Based on: 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), 10-K (reporting date: 2018-11-30).

2023 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 19,409 ÷ 29,779 = 0.65

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 19,409 ÷ 16,974 = 1.14

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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 improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019	Nov 30, 2018
As Reported
Selected Financial Data (US$ in millions)
Total assets	29,779)	27,165)	27,241)	24,284)	20,762)	18,769)
Stockholders’ equity	16,518)	14,051)	14,797)	13,264)	10,530)	9,362)
Solvency Ratio
Financial leverage¹	1.80	1.93	1.84	1.83	1.97	2.00
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets	16,974)	14,378)	14,573)	13,542)	10,071)	8,188)
Adjusted stockholders’ equity	3,713)	1,264)	2,129)	2,522)	(161)	(1,219)
Solvency Ratio
Adjusted financial leverage²	4.57	11.38	6.84	5.37	—	—

Based on: 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), 10-K (reporting date: 2018-11-30).

2023 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 29,779 ÷ 16,518 = 1.80

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 16,974 ÷ 3,713 = 4.57

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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 increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019	Nov 30, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	5,428)	4,756)	4,822)	5,260)	2,951)	2,591)
Stockholders’ equity	16,518)	14,051)	14,797)	13,264)	10,530)	9,362)
Profitability Ratio
ROE¹	32.86%	33.85%	32.59%	39.66%	28.03%	27.67%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income	5,428)	4,756)	4,822)	5,260)	2,951)	2,591)
Adjusted stockholders’ equity	3,713)	1,264)	2,129)	2,522)	(161)	(1,219)
Profitability Ratio
Adjusted ROE²	146.19%	376.27%	226.49%	208.56%	—	—

Based on: 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), 10-K (reporting date: 2018-11-30).

2023 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 5,428 ÷ 16,518 = 32.86%

² Adjusted ROE = 100 × Net income ÷ Adjusted stockholders’ equity
= 100 × 5,428 ÷ 3,713 = 146.19%

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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 improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019	Nov 30, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	5,428)	4,756)	4,822)	5,260)	2,951)	2,591)
Total assets	29,779)	27,165)	27,241)	24,284)	20,762)	18,769)
Profitability Ratio
ROA¹	18.23%	17.51%	17.70%	21.66%	14.22%	13.80%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income	5,428)	4,756)	4,822)	5,260)	2,951)	2,591)
Adjusted total assets	16,974)	14,378)	14,573)	13,542)	10,071)	8,188)
Profitability Ratio
Adjusted ROA²	31.98%	33.08%	33.09%	38.84%	29.31%	31.64%

Based on: 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), 10-K (reporting date: 2018-11-30).

2023 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 5,428 ÷ 29,779 = 18.23%

² Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 5,428 ÷ 16,974 = 31.98%

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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 2021 to 2022 and from 2022 to 2023.

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)