Linde plc (NASDAQ:LIN)

Goodwill

The goodwill balance has shown a consistent downward trend from 28,201 million US dollars in 2020 to 25,937 million US dollars in 2024, indicating a reduction of approximately 8%. There is a slight increase noted in 2023, but the overall movement over the five-year period is declining.

Customer Relationships

Customer relationships intangible assets have decreased steadily each year from 13,776 million US dollars at the end of 2020 to 10,972 million US dollars in 2024. This represents a significant depreciation of about 20%, reflecting ongoing amortization or revaluation impacts.

Brands/Tradenames

The value of brands and tradenames also declined from 2,895 million US dollars in 2020 to 2,504 million US dollars in 2024. The decline is gradual but consistent, indicating ongoing amortization or impairment effects on these intangible assets.

Other Intangible Assets

Other intangible assets initially declined from 1,697 million US dollars in 2020 to 1,629 million in 2021 but then increased to 1,934 million US dollars by 2024. This slight recovery suggests some additions or revaluations during the latter years.

Other Intangible Assets, Cost

The cost basis of other intangible assets steadily decreased from 18,368 million US dollars in 2020 to 15,410 million US dollars in 2024. This reduction in cost base may be due to disposals, write-offs, or amortization charges.

Accumulated Amortization

Accumulated amortization shows a clear increasing trend in negative amounts, moving from -2,184 million US dollars in 2020 to -4,080 million US dollars in 2024. This reflects ongoing amortization expense accumulating over time against intangible assets.

Other Intangible Assets, Net

The net value of other intangible assets decreased significantly over the period, from 16,184 million US dollars in 2020 to 11,330 million US dollars in 2024. This trend is consistent with increasing accumulated amortization and reductions in the cost basis.

Goodwill and Other Intangible Assets (Total)

The combined balance of goodwill and other intangible assets shows a downward trend from 44,385 million US dollars in 2020 to 37,267 million US dollars in 2024. This decrease of approximately 16% over the five years indicates a net reduction in the overall intangible asset base.

The financial data reveals several notable trends over the five-year period ending December 31, 2024, with respect to both reported and goodwill-adjusted figures for total assets and shareholders' equity.

Total Assets

The reported total assets decreased from US$88,229 million in 2020 to US$80,147 million in 2024, demonstrating a gradual decline with minor fluctuations. The largest decrease occurred between 2020 and 2022, followed by a stabilization trend around the US$80 billion mark from 2022 onwards.

In contrast, the adjusted total assets, which presumably exclude goodwill, also declined from US$60,028 million in 2020 to US$54,210 million in 2024. The reduction was sharper in the earlier years, particularly from 2020 to 2021, after which the adjusted assets showed relative stability with only slight increments through 2023 and 2024.

Shareholders' Equity

The reported total shareholders’ equity consistently decreased from US$47,317 million in 2020 to US$38,092 million in 2024. This steady decline indicates a reduction in net assets attributable to equity holders, with the largest year-to-year drops occurring between 2021 and 2023. The decline appears to slow slightly by 2024, but the overall trend remains negative.

Similarly, the adjusted total shareholders’ equity, accounting for adjustments such as goodwill, dropped significantly from US$19,116 million in 2020 to US$12,155 million in 2024. This larger proportional decrease compared to the reported figure suggests the impact of asset adjustments on equity is substantial. The adjusted equity exhibited sharper decreases especially between 2021 and 2023, indicating potential impairments or write-downs affecting goodwill or other intangible assets.

Overall, both reported and adjusted financial data show a downward trend in total assets and shareholders’ equity over the reviewed period. The adjustments related to goodwill and other factors have a pronounced effect on the equity figures, resulting in a more pronounced decline in adjusted shareholders’ equity. This pattern may reflect strategic asset revaluation, impairments, or changes in the balance sheet composition, highlighting an area for further inquiry regarding asset quality and capital structure stability.

The analysis of the financial ratios over the period from 2020 to 2024 reveals several noteworthy trends in asset turnover, financial leverage, return on equity (ROE), and return on assets (ROA), both in reported and goodwill adjusted terms.

Total Asset Turnover

Reported total asset turnover shows an initial increase from 0.31 in 2020 to 0.42 in 2022, followed by stability at 0.41 in 2023 and 2024. The adjusted figures present a similar pattern but at notably higher levels, rising from 0.45 in 2020 to 0.62 in 2022 and maintaining a marginal dip to 0.61 for the subsequent years. This suggests an improvement in the efficiency of asset utilization when adjustments for goodwill are considered, reaching a plateau towards the end of the period.

Financial Leverage

Reported financial leverage remains relatively steady around 1.85 to 2.1 from 2020 through 2024, indicating a modest increase in the ratio of total assets to equity. The adjusted financial leverage is significantly higher, starting at 3.14 in 2020 and increasing progressively to 4.46 by 2024. This indicates that when goodwill adjustments are accounted for, the company appears to be more leveraged, with an upward trend in the reliance on financial leverage over the five years.

Return on Equity (ROE)

The reported ROE demonstrates a consistent and substantial upward trend, increasing from 5.29% in 2020 to 17.23% in 2024, highlighting improved profitability relative to shareholders' equity. The adjusted ROE amplifies this trend markedly, beginning at 13.08% and escalating sharply to 54.01% in 2024. The adjustment for goodwill considerably enhances the perceived profitability, with ROE more than tripling over the period and suggesting effective management of equity and operating performance after excluding goodwill impacts.

Return on Assets (ROA)

Reported ROA increases steadily from 2.83% in 2020 to 8.19% in 2024, indicating better overall asset profitability. Adjusted ROA figures follow a similar upward trajectory with higher values, from 4.17% to 12.11%, demonstrating that asset profitability is significantly higher after goodwill adjustments. This indicates overall improved operational efficiency and asset management within the company over the period examined.

In summary, the financial data reveals enhancements in asset efficiency, leveraging, and profitability across the five years, with adjusted metrics consistently higher than reported metrics, reflecting the impact of goodwill on financial performance measures. The company shows a strong trend towards improved returns for shareholders and better asset utilization. Additionally, the increasing financial leverage under the adjusted basis indicates a higher degree of risk-taking or capital structure optimization contributing to elevated returns.

An analysis of the reported and goodwill adjusted financial data over the five-year period reveals several noteworthy trends related to total assets and asset turnover ratios.

Total Assets

Reported total assets started at US$88,229 million in 2020 and showed a decline over the subsequent years, reaching US$80,147 million by 2024. This represents an overall reduction in reported assets by approximately 9.2% over the period.

Adjusted total assets, which exclude goodwill, followed a similar downward trend but decreased more sharply from US$60,028 million in 2020 to US$54,210 million in 2024, equating to a reduction of about 9.7%. The adjustment implies a significant portion of total assets is attributable to goodwill, which remains excluded in the adjusted figures.

Total Asset Turnover Ratios

The reported total asset turnover ratio demonstrated a consistent improvement from 0.31 in 2020 to 0.42 in 2022, followed by stabilization at 0.41 in both 2023 and 2024. This indicates enhanced efficiency in revenue generation relative to reported assets in the initial years, with the ratio plateauing in the last two years.

Adjusted total asset turnover ratios—calculated excluding goodwill—exhibited a stronger increasing trend, rising from 0.45 in 2020 to 0.62 in 2022 before holding steady at 0.61 through 2023 and 2024. This higher ratio compared to the reported figure suggests that when excluding intangible assets, asset utilization efficiency is markedly better.

Overall, the data reflects a gradual contraction in total asset values coupled with improved asset turnover, particularly when excluding goodwill. The substantial difference between reported and adjusted metrics underscores the impact of goodwill on the asset base and associated performance calculations. The stabilization of turnover ratios in the most recent years may point to a matured operational efficiency level after an initial period of improvement.

The financial data reveals several notable trends in both reported and goodwill-adjusted metrics over the five-year period ending in December 2024.

Total Assets

Reported total assets experienced a decline from US$88,229 million in 2020 to US$80,147 million in 2024, indicating a general contraction of approximately 9%. The most significant decrease occurred between 2020 and 2022, followed by a relatively stable pattern with minor fluctuations afterwards.

Adjusted total assets, which exclude goodwill, declined in a parallel fashion from US$60,028 million in 2020 to US$54,210 million in 2024. This suggests that the reduction in asset base is consistent even when intangible assets are removed, pointing toward a possible shrinkage or divestiture in the company's tangible asset holdings.

Shareholders’ Equity

Reported shareholders’ equity decreased steadily from US$47,317 million in 2020 to US$38,092 million in 2024, a decline of nearly 20%. This consistent downward trend across the period shows erosion in the book value attributable to shareholders, potentially reflecting retained losses, dividends exceeding earnings, or asset write-downs.

The adjusted shareholders’ equity, which again excludes goodwill, showed a sharper relative decline from US$19,116 million in 2020 down to US$12,155 million in 2024. The proportionally larger decrease in adjusted equity indicates that the intangible assets contribute a significant cushion in the reported figures, and their exclusion reveals more severe equity depletion over time.

Financial Leverage

The reported financial leverage ratio, calculated as total assets divided by shareholders’ equity, increased gradually from 1.86 in 2020 to 2.10 in 2024. This indicates a rising reliance on debt or liabilities relative to equity under reported figures, although the increase is moderate.

The adjusted financial leverage ratio presents a more pronounced increase, moving from 3.14 in 2020 to 4.46 in 2024. This sharp rise points to significantly higher leverage when goodwill is excluded, suggesting the company’s financial structure has become more leveraged and potentially riskier over the period, with debt growing faster than the equity base.

In summary, the data reflects a contracting asset base both in reported and adjusted terms, accompanied by steadily declining shareholders’ equity. The increasing leverage ratios, especially on an adjusted basis, signal elevated financial risk due to growing use of debt financing relative to equity. The more pronounced declines and higher leverage under adjusted figures underscore the impact of goodwill on reported financial strength, emphasizing the importance of considering adjusted metrics for a clearer assessment of financial health.

The analysis of the financial data reveals several notable trends regarding equity and return on equity (ROE) for the periods under review.

Total Shareholders’ Equity

The reported total shareholders’ equity displays a consistent downward trend from 47,317 million US dollars in 2020 to 38,092 million US dollars in 2024. This steady decline suggests a reduction in the book value of equity over the period. Similarly, the goodwill adjusted total shareholders’ equity also declines from 19,116 million US dollars in 2020 to 12,155 million US dollars in 2024. The adjustment for goodwill results in a significantly lower equity base at each point in time, indicating that a substantial portion of the reported equity is attributable to intangible assets.

Return on Equity (ROE)

Both reported and adjusted ROEs demonstrate a strong upward trajectory throughout the years. Reported ROE rises from 5.29% in 2020 to 17.23% in 2024, reflecting improving profitability relative to reported equity. The adjusted ROE, which accounts for goodwill, is markedly higher and grows even more substantially from 13.08% in 2020 to 54.01% in 2024. This suggests that when excluding goodwill from equity, the company is generating significantly higher returns on the remaining tangible equity, and the increase over time indicates enhanced operational efficiency and profitability.

Overall, the data indicates a contracting equity base accompanied by increasing profitability, especially when adjusted for goodwill. This combination leads to notably higher adjusted returns on equity, implying a more favorable performance outlook when intangible assets are excluded from the equity calculation.

The financial data reveals several notable trends over the five-year period culminating in 2024. There is a general decline in reported total assets from US$88,229 million in 2020 to US$80,147 million in 2024, indicating a reduction of approximately 9%. This declining trend is exhibited consistently year-over-year with a minor increase observed in 2023. Correspondingly, the adjusted total assets, which likely exclude goodwill or intangible assets, also decreased from US$60,028 million in 2020 to US$54,210 million in 2024. This decrease amounts to roughly 10%, mirroring the trend observed in reported total assets but with slightly less variability and a steady decline.

In contrast, both reported and adjusted Return on Assets (ROA) metrics exhibit an upward trajectory during the same period. Reported ROA improved significantly from 2.83% in 2020 to 8.19% in 2024, nearly tripling over five years. This increase implies enhanced profitability or more efficient use of total assets reported on the balance sheet. Adjusted ROA, which accounts for goodwill adjustments, shows an even more pronounced rise, increasing from 4.17% in 2020 to 12.11% in 2024. This progression suggests that when excluding intangible assets, the company’s asset profitability has improved markedly, indicating a potentially stronger core operational performance.

The divergence between reported and adjusted data is substantial, especially in ROA, with adjusted ROA consistently higher than the reported ROA by a margin of approximately 1.34 to 4 percentage points. This difference highlights the impact of goodwill and intangible assets on the calculation of returns and underscores the importance of considering adjusted figures for a clearer view of operational effectiveness. Overall, while asset bases have shrunk moderately, profitability relative to assets has increased considerably, indicating improvements in asset utilization or earnings quality over the analyzed period.