An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.
Adjustments to Financial Statements for Operating Leases
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1, 2 Equal to total present value of future operating lease payments.
PayPal Holdings Inc., Financial Data: Reported vs. Adjusted
Adjusted Financial Ratios for Operating Leases (Summary)
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
Financial ratio | Description | The company |
---|---|---|
Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | PayPal Holdings Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022. |
Adjusted debt to equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | PayPal Holdings Inc. adjusted debt to equity ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | PayPal Holdings Inc. adjusted ROA deteriorated from 2020 to 2021 and from 2021 to 2022. |
PayPal Holdings Inc., Financial Ratios: Reported vs. Adjusted
Adjusted Total Asset Turnover
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
2022 Calculations
1 Total asset turnover = Net revenues ÷ Total assets
= 27,518 ÷ 78,717 = 0.35
2 Adjusted total asset turnover = Net revenues ÷ Adjusted total assets
= 27,518 ÷ 78,717 = 0.35
Activity ratio | Description | The company |
---|---|---|
Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | PayPal Holdings Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022. |
Adjusted Debt to Equity
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
2022 Calculations
1 Debt to equity = Total debt ÷ Total PayPal stockholders’ equity
= 10,835 ÷ 20,274 = 0.53
2 Adjusted debt to equity = Adjusted total debt ÷ Total PayPal stockholders’ equity
= 11,555 ÷ 20,274 = 0.57
Solvency ratio | Description | The company |
---|---|---|
Adjusted debt-to-equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | PayPal Holdings Inc. adjusted debt-to-equity ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
2022 Calculations
1 ROA = 100 × Net income ÷ Total assets
= 100 × 2,419 ÷ 78,717 = 3.07%
2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 2,419 ÷ 78,717 = 3.07%
Profitability ratio | Description | The company |
---|---|---|
Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | PayPal Holdings Inc. adjusted ROA deteriorated from 2020 to 2021 and from 2021 to 2022. |