Stock Analysis on Net
Stock Analysis on Net

Alphabet Inc. (NASDAQ:GOOG)

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Alphabet Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Federal and state 22,485 17,125 17,120 10,126 4,789
Foreign 2,468 2,526 2,434 2,692 1,687
Current 24,953 19,651 19,554 12,818 6,476
Federal and state (5,350) (7,482) (8,052) 2,018 1,552
Foreign 94 (247) (146) (135) (215)
Deferred (5,256) (7,729) (8,198) 1,883 1,337
Provision for income taxes 19,697 11,922 11,356 14,701 7,813

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Alphabet Inc. current increased from 2022 to 2023 and from 2023 to 2024.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Alphabet Inc. deferred increased from 2022 to 2023 and from 2023 to 2024.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Alphabet Inc. provision for income taxes increased from 2022 to 2023 and from 2023 to 2024.

Effective Income Tax Rate (EITR)

Alphabet Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
U.S. federal statutory tax rate 21.00% 21.00% 21.00% 21.00% 21.00%
Foreign income taxed at different rates 0.50% 0.30% 3.00% 0.20% -0.30%
Foreign-derived intangible income deduction -3.80% -4.60% -5.40% -2.50% -3.00%
Stock-based compensation expense -1.50% -0.80% -1.20% -2.50% -1.70%
Federal research credit -1.50% -1.80% -2.20% -1.60% -2.30%
Deferred tax asset valuation allowance 0.40% 0.60% 0.90% 0.60% 1.40%
State and local income taxes 1.10% 1.00% 0.80% 1.00% 1.10%
Effect of tax law change 0.00% -1.40% 0.00% 0.00% 0.00%
Other 0.20% -0.40% -1.00% 0.00% 0.00%
Effective tax rate 16.40% 13.90% 15.90% 16.20% 16.20%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Item Description The company
Effective tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Alphabet Inc. effective tax rate decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

Components of Deferred Tax Assets and Liabilities

Alphabet Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Accrued employee benefits 1,834 1,855 955 — —
Accruals and reserves not currently deductible 2,552 2,481 1,956 1,816 1,049
Tax credit 6,384 6,609 6,002 5,179 3,723
Net operating losses 3,472 2,965 2,557 1,790 1,085
Operating leases 3,336 3,526 2,711 2,503 2,620
Capitalized research and development 25,903 17,757 10,381 1,843 —
Other 1,376 1,951 2,289 1,665 3,086
Deferred tax assets 44,857 37,144 26,851 14,796 11,563
Valuation allowance (11,493) (10,999) (9,553) (7,129) (4,823)
Deferred tax assets net of valuation allowance 33,364 26,145 17,298 7,667 6,740
Property and equipment, net (9,932) (8,189) (6,607) (5,237) (3,382)
Net investment gains/losses (2,978) (2,405) (2,361) (3,229) (1,901)
Operating leases (2,986) (2,965) (2,491) (2,228) (2,354)
Other (1,008) (902) (1,092) (946) (1,580)
Deferred tax liabilities (16,904) (14,461) (12,551) (11,640) (9,217)
Net deferred tax assets (liabilities) 16,460 11,684 4,747 (3,973) (2,477)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Item Description The company
Deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Alphabet Inc. deferred tax assets increased from 2022 to 2023 and from 2023 to 2024.
Deferred tax assets net of valuation allowance Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Alphabet Inc. deferred tax assets net of valuation allowance increased from 2022 to 2023 and from 2023 to 2024.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Alphabet Inc. net deferred tax assets (liabilities) increased from 2022 to 2023 and from 2023 to 2024.

Deferred Tax Assets and Liabilities, Classification

Alphabet Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Deferred tax assets 17,180 12,169 5,261 1,284 1,084
Deferred tax liabilities 720 485 514 5,257 3,561

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Item Description The company
Deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Alphabet Inc. deferred tax assets increased from 2022 to 2023 and from 2023 to 2024.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Alphabet Inc. deferred tax liabilities decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

Adjustments to Financial Statements: Removal of Deferred Taxes

Alphabet Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Adjustment to Total Assets
Total assets (as reported) 450,256 402,392 365,264 359,268 319,616
Less: Noncurrent deferred tax assets, net 17,180 12,169 5,261 1,284 1,084
Total assets (adjusted) 433,076 390,223 360,003 357,984 318,532
Adjustment to Total Liabilities
Total liabilities (as reported) 125,172 119,013 109,120 107,633 97,072
Less: Noncurrent deferred tax liabilities, net 720 485 514 5,257 3,561
Total liabilities (adjusted) 124,452 118,528 108,606 102,376 93,511
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 325,084 283,379 256,144 251,635 222,544
Less: Net deferred tax assets (liabilities) 16,460 11,684 4,747 (3,973) (2,477)
Stockholders’ equity (adjusted) 308,624 271,695 251,397 255,608 225,021
Adjustment to Net Income
Net income (as reported) 100,118 73,795 59,972 76,033 40,269
Add: Deferred income tax expense (benefit) (5,256) (7,729) (8,198) 1,883 1,337
Net income (adjusted) 94,862 66,066 51,774 77,916 41,606

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Alphabet Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Alphabet Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net Profit Margin
Reported net profit margin 28.60% 24.01% 21.20% 29.51% 22.06%
Adjusted net profit margin 27.10% 21.49% 18.31% 30.24% 22.79%
Total Asset Turnover
Reported total asset turnover 0.78 0.76 0.77 0.72 0.57
Adjusted total asset turnover 0.81 0.79 0.79 0.72 0.57
Financial Leverage
Reported financial leverage 1.39 1.42 1.43 1.43 1.44
Adjusted financial leverage 1.40 1.44 1.43 1.40 1.42
Return on Equity (ROE)
Reported ROE 30.80% 26.04% 23.41% 30.22% 18.09%
Adjusted ROE 30.74% 24.32% 20.59% 30.48% 18.49%
Return on Assets (ROA)
Reported ROA 22.24% 18.34% 16.42% 21.16% 12.60%
Adjusted ROA 21.90% 16.93% 14.38% 21.77% 13.06%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Alphabet Inc. adjusted net profit margin ratio improved from 2022 to 2023 and from 2023 to 2024.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Alphabet Inc. adjusted total asset turnover ratio improved from 2022 to 2023 and from 2023 to 2024.
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.		 Alphabet Inc. adjusted financial leverage ratio increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Alphabet Inc. adjusted ROE improved from 2022 to 2023 and from 2023 to 2024.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Alphabet Inc. adjusted ROA improved from 2022 to 2023 and from 2023 to 2024.

Alphabet Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net income 100,118 73,795 59,972 76,033 40,269
Revenues 350,018 307,394 282,836 257,637 182,527
Profitability Ratio
Net profit margin1 28.60% 24.01% 21.20% 29.51% 22.06%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 94,862 66,066 51,774 77,916 41,606
Revenues 350,018 307,394 282,836 257,637 182,527
Profitability Ratio
Adjusted net profit margin2 27.10% 21.49% 18.31% 30.24% 22.79%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 Net profit margin = 100 × Net income ÷ Revenues
= 100 × 100,118 ÷ 350,018 = 28.60%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenues
= 100 × 94,862 ÷ 350,018 = 27.10%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Alphabet Inc. adjusted net profit margin ratio improved from 2022 to 2023 and from 2023 to 2024.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Revenues 350,018 307,394 282,836 257,637 182,527
Total assets 450,256 402,392 365,264 359,268 319,616
Activity Ratio
Total asset turnover1 0.78 0.76 0.77 0.72 0.57
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenues 350,018 307,394 282,836 257,637 182,527
Adjusted total assets 433,076 390,223 360,003 357,984 318,532
Activity Ratio
Adjusted total asset turnover2 0.81 0.79 0.79 0.72 0.57

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 350,018 ÷ 450,256 = 0.78

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 350,018 ÷ 433,076 = 0.81

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Alphabet Inc. adjusted total asset turnover ratio improved from 2022 to 2023 and from 2023 to 2024.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Total assets 450,256 402,392 365,264 359,268 319,616
Stockholders’ equity 325,084 283,379 256,144 251,635 222,544
Solvency Ratio
Financial leverage1 1.39 1.42 1.43 1.43 1.44
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 433,076 390,223 360,003 357,984 318,532
Adjusted stockholders’ equity 308,624 271,695 251,397 255,608 225,021
Solvency Ratio
Adjusted financial leverage2 1.40 1.44 1.43 1.40 1.42

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= 450,256 ÷ 325,084 = 1.39

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 433,076 ÷ 308,624 = 1.40

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.		 Alphabet Inc. adjusted financial leverage ratio increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net income 100,118 73,795 59,972 76,033 40,269
Stockholders’ equity 325,084 283,379 256,144 251,635 222,544
Profitability Ratio
ROE1 30.80% 26.04% 23.41% 30.22% 18.09%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 94,862 66,066 51,774 77,916 41,606
Adjusted stockholders’ equity 308,624 271,695 251,397 255,608 225,021
Profitability Ratio
Adjusted ROE2 30.74% 24.32% 20.59% 30.48% 18.49%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 100,118 ÷ 325,084 = 30.80%

2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted stockholders’ equity
= 100 × 94,862 ÷ 308,624 = 30.74%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Alphabet Inc. adjusted ROE improved from 2022 to 2023 and from 2023 to 2024.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net income 100,118 73,795 59,972 76,033 40,269
Total assets 450,256 402,392 365,264 359,268 319,616
Profitability Ratio
ROA1 22.24% 18.34% 16.42% 21.16% 12.60%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 94,862 66,066 51,774 77,916 41,606
Adjusted total assets 433,076 390,223 360,003 357,984 318,532
Profitability Ratio
Adjusted ROA2 21.90% 16.93% 14.38% 21.77% 13.06%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 100,118 ÷ 450,256 = 22.24%

2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 94,862 ÷ 433,076 = 21.90%

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