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)

Applied Materials Inc., adjustments to financial statements

US$ in millions

	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
Adjustment to Total Assets
Total assets (as reported)	34,409)	30,729)	26,726)	25,825)	22,353)	19,024)
Less: Goodwill	3,732)	3,732)	3,700)	3,479)	3,466)	3,399)
Total assets (adjusted)	30,677)	26,997)	23,026)	22,346)	18,887)	15,625)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	19,001)	16,349)	12,194)	12,247)	10,578)	8,214)
Less: Goodwill	3,732)	3,732)	3,700)	3,479)	3,466)	3,399)
Stockholders’ equity (adjusted)	15,269)	12,617)	8,494)	8,768)	7,112)	4,815)

Based on: 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27).

Applied Materials Inc., Financial Data: Reported vs. Adjusted

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Applied Materials Inc., adjusted financial ratios

	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
Total Asset Turnover
Reported total asset turnover	0.79	0.86	0.96	0.89	0.77	0.77
Adjusted total asset turnover	0.89	0.98	1.12	1.03	0.91	0.93
Financial Leverage
Reported financial leverage	1.81	1.88	2.19	2.11	2.11	2.32
Adjusted financial leverage	2.01	2.14	2.71	2.55	2.66	3.25
Return on Equity (ROE)
Reported ROE	37.77%	41.94%	53.51%	48.08%	34.21%	32.94%
Adjusted ROE	47.00%	54.34%	76.82%	67.15%	50.89%	56.20%
Return on Assets (ROA)
Reported ROA	20.86%	22.31%	24.41%	22.80%	16.19%	14.22%
Adjusted ROA	23.40%	25.40%	28.34%	26.35%	19.16%	17.32%

Based on: 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Applied Materials Inc. adjusted total asset turnover ratio deteriorated 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.	Applied Materials Inc. adjusted financial leverage ratio decreased from 2022 to 2023 and from 2023 to 2024.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Applied Materials Inc. adjusted ROE deteriorated from 2022 to 2023 and from 2023 to 2024.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Applied Materials Inc. adjusted ROA deteriorated from 2022 to 2023 and from 2023 to 2024.

Applied Materials Inc., Financial Ratios: Reported vs. Adjusted

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	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
As Reported
Selected Financial Data (US$ in millions)
Net revenue	27,176)	26,517)	25,785)	23,063)	17,202)	14,608)
Total assets	34,409)	30,729)	26,726)	25,825)	22,353)	19,024)
Activity Ratio
Total asset turnover¹	0.79	0.86	0.96	0.89	0.77	0.77
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net revenue	27,176)	26,517)	25,785)	23,063)	17,202)	14,608)
Adjusted total assets	30,677)	26,997)	23,026)	22,346)	18,887)	15,625)
Activity Ratio
Adjusted total asset turnover²	0.89	0.98	1.12	1.03	0.91	0.93

Based on: 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27).

2024 Calculations

¹ Total asset turnover = Net revenue ÷ Total assets
= 27,176 ÷ 34,409 = 0.79

² Adjusted total asset turnover = Net revenue ÷ Adjusted total assets
= 27,176 ÷ 30,677 = 0.89

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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.	Applied Materials Inc. adjusted total asset turnover ratio deteriorated from 2022 to 2023 and from 2023 to 2024.

	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets	34,409)	30,729)	26,726)	25,825)	22,353)	19,024)
Stockholders’ equity	19,001)	16,349)	12,194)	12,247)	10,578)	8,214)
Solvency Ratio
Financial leverage¹	1.81	1.88	2.19	2.11	2.11	2.32
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets	30,677)	26,997)	23,026)	22,346)	18,887)	15,625)
Adjusted stockholders’ equity	15,269)	12,617)	8,494)	8,768)	7,112)	4,815)
Solvency Ratio
Adjusted financial leverage²	2.01	2.14	2.71	2.55	2.66	3.25

Based on: 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27).

2024 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 34,409 ÷ 19,001 = 1.81

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 30,677 ÷ 15,269 = 2.01

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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.	Applied Materials Inc. adjusted financial leverage ratio decreased from 2022 to 2023 and from 2023 to 2024.

	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income	7,177)	6,856)	6,525)	5,888)	3,619)	2,706)
Stockholders’ equity	19,001)	16,349)	12,194)	12,247)	10,578)	8,214)
Profitability Ratio
ROE¹	37.77%	41.94%	53.51%	48.08%	34.21%	32.94%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income	7,177)	6,856)	6,525)	5,888)	3,619)	2,706)
Adjusted stockholders’ equity	15,269)	12,617)	8,494)	8,768)	7,112)	4,815)
Profitability Ratio
Adjusted ROE²	47.00%	54.34%	76.82%	67.15%	50.89%	56.20%

Based on: 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27).

2024 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 7,177 ÷ 19,001 = 37.77%

² Adjusted ROE = 100 × Net income ÷ Adjusted stockholders’ equity
= 100 × 7,177 ÷ 15,269 = 47.00%

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

	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income	7,177)	6,856)	6,525)	5,888)	3,619)	2,706)
Total assets	34,409)	30,729)	26,726)	25,825)	22,353)	19,024)
Profitability Ratio
ROA¹	20.86%	22.31%	24.41%	22.80%	16.19%	14.22%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income	7,177)	6,856)	6,525)	5,888)	3,619)	2,706)
Adjusted total assets	30,677)	26,997)	23,026)	22,346)	18,887)	15,625)
Profitability Ratio
Adjusted ROA²	23.40%	25.40%	28.34%	26.35%	19.16%	17.32%

Based on: 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27).

2024 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 7,177 ÷ 34,409 = 20.86%

² Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 7,177 ÷ 30,677 = 23.40%

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

Applied Materials Inc. (NASDAQ:AMAT)

Analysis of Goodwill and Intangible Assets

Adjustments to Financial Statements: Removal of Goodwill

Applied Materials Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Applied Materials Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)