Alphabet Inc. (NASDAQ:GOOG)

An examination of the financial information reveals a consistent difference between reported and adjusted total assets and stockholders’ equity over the five-year period. The adjustments appear to relate to the removal of goodwill and associated intangible assets, resulting in lower reported values when these items are excluded.

Total Assets

Reported total assets demonstrate an increasing trend from US$359,268 million in 2021 to US$595,281 million in 2025. However, adjusted total assets, which exclude goodwill and related intangibles, exhibit a similar upward trajectory, albeit at lower values, ranging from US$336,312 million in 2021 to US$561,901 million in 2025. The difference between reported and adjusted total assets narrows slightly over time, suggesting a potential deceleration in the accumulation of goodwill relative to other assets.

Stockholders’ Equity

Reported stockholders’ equity also shows a consistent increase, moving from US$251,635 million in 2021 to US$415,265 million in 2025. Correspondingly, adjusted stockholders’ equity, reflecting the exclusion of goodwill-related adjustments, rises from US$228,679 million to US$381,885 million over the same period. The gap between reported and adjusted equity remains relatively stable in absolute terms, indicating a consistent impact from the goodwill adjustments on the reported equity position.

The consistent adjustments to both total assets and stockholders’ equity suggest a systematic approach to accounting for goodwill. The magnitude of these adjustments is substantial, representing a significant portion of the reported figures. The observed trends indicate that while the company is growing, a portion of that growth, as reflected in reported figures, is attributable to acquisitions accounted for through goodwill. The adjustments provide a view of the company’s financial position excluding the impact of these acquisitions.

Adjustment Magnitude

In 2021, the adjustment to total assets was approximately US$22,956 million, and to stockholders’ equity approximately US$22,956 million. By 2025, these adjustments had increased to US$33,380 million for total assets and US$33,380 million for stockholders’ equity. This indicates a growing absolute impact of goodwill adjustments over the period.

The consistent difference between reported and adjusted figures highlights the importance of considering the impact of goodwill when evaluating the company’s financial performance and position. Further investigation into the specific acquisitions contributing to the goodwill balance may provide additional insights.

The financial ratios presented demonstrate the impact of adjusting for goodwill and intangible assets. Generally, removing goodwill from the asset base results in improved profitability and efficiency metrics, though the magnitude of the effect varies across ratios and time periods.

Total Asset Turnover

Reported total asset turnover exhibited a slight increase from 0.72 in 2021 to 0.78 in 2024, followed by a decrease to 0.68 in 2025. However, the adjusted total asset turnover consistently showed higher values across all years, ranging from 0.77 to 0.84, indicating a more efficient use of assets when goodwill is excluded. The adjusted ratio also demonstrated a similar trend, peaking in 2024 and declining in 2025, but remained above the reported figures.

Financial Leverage

Reported financial leverage remained relatively stable between 1.39 and 1.43 over the five-year period. The adjusted financial leverage showed a slight increase from 1.47 in 2021 and 2022 to 1.48 in 2022, then decreased to 1.43 in 2024, and returned to 1.47 in 2025. The difference between reported and adjusted leverage remained minimal, suggesting that goodwill does not substantially impact the company’s capital structure as measured by this ratio.

Return on Equity (ROE)

Reported ROE fluctuated considerably, decreasing from 30.22% in 2021 to 23.41% in 2022, increasing to 30.80% in 2024, and reaching 31.83% in 2025. The adjusted ROE consistently exceeded the reported ROE in each year, ranging from 26.40% to 34.61%. The largest difference between the reported and adjusted ROE occurred in 2021 and 2024, indicating a more significant positive impact from removing goodwill during those periods. Both reported and adjusted ROE show an upward trend towards the end of the period.

Return on Assets (ROA)

Reported ROA followed a similar pattern to ROE, declining from 21.16% in 2021 to 16.42% in 2022, and increasing to 22.24% in 2024, before stabilizing at 22.20% in 2025. The adjusted ROA consistently presented higher values than the reported ROA, ranging from 17.83% to 23.93%. The difference between the two metrics was most pronounced in 2024, suggesting that the exclusion of goodwill had a substantial positive effect on asset utilization and profitability during that year. Both reported and adjusted ROA show an upward trend towards the end of the period.

In summary, adjusting for goodwill consistently resulted in higher asset turnover and profitability ratios. The impact on financial leverage was less substantial. The increasing divergence between reported and adjusted ratios in later years suggests a growing proportion of goodwill relative to other assets, amplifying the effect of its removal on these key performance indicators.

An examination of the financial information reveals trends in both total asset values and associated turnover ratios over a five-year period. Reported total assets demonstrate a consistent increase, while adjusted total assets show a similar, though slightly less pronounced, upward trajectory. The reported and adjusted total asset turnover ratios exhibit fluctuations during the period, with some divergence in their patterns.

Reported Total Assets

Reported total assets increased from US$359,268 million in 2021 to US$595,281 million in 2025. This represents a substantial overall growth, with increases observed in each year of the period. The largest single-year increase occurred between 2023 and 2024, adding US$47,864 million to the asset base.

Adjusted Total Assets

Adjusted total assets began at US$336,312 million in 2021 and rose to US$561,901 million by 2025. While also exhibiting year-over-year growth, the magnitude of the increases was generally smaller than those observed in reported total assets. The adjustment appears to moderate the overall asset value, potentially reflecting the exclusion of certain items like goodwill or intangible assets.

Reported Total Asset Turnover

The reported total asset turnover ratio fluctuated between 0.68 and 0.78 over the five-year period. It initially increased from 0.72 in 2021 to 0.77 in 2022, then experienced a slight decline to 0.76 in 2023. A subsequent increase to 0.78 was noted in 2024, followed by a decrease to 0.68 in 2025. This suggests a variable efficiency in generating revenue from reported assets.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio demonstrated a different pattern. It rose from 0.77 in 2021 to a peak of 0.84 in 2022 and remained at 0.84 in 2023. A slight decrease to 0.82 was observed in 2024, and a more pronounced decline to 0.72 occurred in 2025. The adjusted ratio consistently exceeded the reported ratio throughout the period, indicating that the company appears more efficient in utilizing assets when adjustments are made. The decline in 2025 warrants further investigation.

The divergence between the reported and adjusted turnover ratios suggests that the components excluded in the adjusted figures—likely including goodwill and intangible assets—may be impacting the reported asset efficiency. The decrease in both turnover ratios in 2025, despite continued asset growth, could indicate a slowdown in revenue generation relative to the asset base.

An examination of the financial information reveals trends in both reported and adjusted asset and equity figures, impacting calculated financial leverage ratios over the five-year period. Reported total assets demonstrate consistent growth, accelerating notably between 2023 and 2025. Adjusted total assets follow a similar pattern, though the absolute values are consistently lower than their reported counterparts. Stockholders’ equity, both reported and adjusted, also exhibits a general upward trend, with a significant increase observed between 2024 and 2025.

Adjusted Financial Leverage

Adjusted financial leverage shows a slight increasing trend from 1.47 in 2021 to 1.48 in 2022, remaining relatively stable at 1.47 in 2023. A decrease to 1.43 is observed in 2024, followed by a return to 1.47 in 2025. This suggests a modest increase in the proportion of debt relative to adjusted equity over the period, with a temporary dip in 2024.

Asset Adjustments

The difference between reported and adjusted total assets remains relatively consistent across the observed period, averaging approximately US$23 billion. This suggests a systematic adjustment is being applied to the reported asset base, potentially related to the treatment of goodwill or intangible assets. The consistent nature of this adjustment implies a recurring accounting treatment.

Equity Adjustments

Similar to assets, a consistent difference exists between reported and adjusted stockholders’ equity, averaging around US$23 billion. This parallel adjustment to both assets and equity reinforces the likelihood of a related accounting treatment impacting both sides of the balance sheet. The magnitude of the equity adjustment generally increases in line with overall equity growth.

Reported financial leverage remains relatively stable, fluctuating between 1.39 and 1.43 throughout the period. The slight variations in reported leverage do not mirror the adjustments seen in the adjusted leverage calculation, indicating the impact of the asset and equity adjustments is partially offset by other factors within the reported financial statements.

The observed trends suggest a company employing consistent accounting practices related to goodwill and intangible assets, resulting in systematic adjustments to both asset and equity values. While adjusted financial leverage shows a slight overall increase, it remains within a narrow range, indicating a generally stable capital structure when considering these adjustments.

Analysis reveals a consistent pattern of divergence between reported and adjusted return on equity (ROE) over the five-year period. Both reported and adjusted stockholders’ equity demonstrate an overall upward trajectory, though with varying rates of growth. The adjusted ROE consistently exceeds the reported ROE throughout the observed timeframe.

Stockholders’ Equity

Reported stockholders’ equity increased from US$251,635 million in 2021 to US$415,265 million in 2025, representing a substantial cumulative increase. Adjusted stockholders’ equity also rose, moving from US$228,679 million to US$381,885 million over the same period. The difference between the two equity figures widens over time, indicating a growing impact from adjustments.

Reported ROE

Reported ROE experienced fluctuations. It decreased from 30.22% in 2021 to 23.41% in 2022, then recovered to 26.04% in 2023, and continued to rise to 30.80% in 2024 before reaching 31.83% in 2025. This suggests some volatility in profitability as measured by the reported figures.

Adjusted ROE

Adjusted ROE also showed some fluctuation, but generally trended upward. It began at 33.25% in 2021, decreased to 26.40% in 2022, increased to 29.03% in 2023, and then rose significantly to 34.15% in 2024, concluding at 34.61% in 2025. The adjusted ROE consistently remained above the reported ROE, suggesting that adjustments to stockholders’ equity positively impact the return metric.

The consistent difference between reported and adjusted ROE suggests that a significant portion of reported equity may be attributable to items subject to adjustment. The increasing divergence between the two equity measures over the period indicates that these adjustments are becoming more substantial. The upward trend in both reported and adjusted ROE, particularly in the later years, suggests improving profitability, although the adjusted figures provide a potentially more representative view of underlying performance.

An examination of the financial information reveals trends in both reported and adjusted total assets, alongside their corresponding returns on assets. Total assets, both reported and adjusted, demonstrate a consistent upward trajectory throughout the observed period. However, the adjusted figures consistently fall below the reported figures, indicating a significant presence of goodwill and intangible assets impacting the overall asset base.

Total Assets

Reported total assets increased from US$359,268 million in 2021 to US$595,281 million in 2025, representing a substantial growth rate. Adjusted total assets also increased, moving from US$336,312 million in 2021 to US$561,901 million in 2025. The difference between reported and adjusted assets widens over time, suggesting increasing levels of goodwill and intangible assets.

Reported Return on Assets (ROA)

Reported ROA experienced some fluctuation. It decreased from 21.16% in 2021 to 16.42% in 2022, then recovered to 18.34% in 2023, and further increased to 22.24% in 2024 before stabilizing at 22.20% in 2025. This indicates a period of initial decline followed by a strong recovery and subsequent stabilization in profitability relative to reported assets.

Adjusted Return on Assets (ROA)

Adjusted ROA mirrors the trend of reported ROA, though with slightly different magnitudes. It decreased from 22.61% in 2021 to 17.83% in 2022, increased to 19.77% in 2023, and rose to 23.93% in 2024, before settling at 23.52% in 2025. The adjusted ROA consistently exceeds the reported ROA, suggesting that the inclusion of goodwill and intangible assets depresses the reported profitability metrics. The difference between adjusted and reported ROA is most pronounced in 2024 and 2025.

The consistent difference between reported and adjusted ROA highlights the impact of goodwill and intangible assets on the company’s financial performance. While reported ROA provides a view of profitability based on the full asset base, adjusted ROA offers a perspective excluding these potentially less tangible components. The increasing gap between the two metrics suggests that a growing portion of the company’s assets are comprised of goodwill and intangibles, which warrants further investigation into the underlying drivers and potential impairment risks.