Goodwill and Intangible Asset Disclosure
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)

Synopsys Inc., balance sheet: goodwill and intangible assets

US$ in thousands

	Oct 31, 2024	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
Goodwill	3,448,850)	4,070,336)	3,842,234)	3,575,785)	3,365,114)	3,171,179)
Core/developed technology	904,347)	1,135,347)	1,083,703)	911,903)	827,232)	791,647)
Customer relationships	314,140)	463,371)	426,242)	404,571)	380,838)	358,661)
Contract rights intangible	176,382)	194,930)	190,666)	193,317)	192,812)	184,304)
Trademarks and trade names	12,925)	52,825)	52,795)	43,095)	43,096)	42,929)
In-process research and development (IPR&D)	—)	—)	—)	—)	1,214)	1,200)
Capitalized software development costs	—)	50,795)	48,591)	46,098)	44,122)	40,077)
Intangible assets, gross carrying amount	1,407,794)	1,897,268)	1,801,997)	1,598,984)	1,489,314)	1,418,818)
Accumulated amortization and impairment	(1,212,630)	(1,523,074)	(1,415,551)	(1,319,852)	(1,234,992)	(1,139,444)
Intangible assets, net amount	195,164)	374,194)	386,446)	279,132)	254,322)	279,374)
Goodwill and intangible assets	3,644,014)	4,444,530)	4,228,680)	3,854,917)	3,619,436)	3,450,553)

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

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Item	Description	The company
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Synopsys Inc. goodwill increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.
Intangible assets, net amount	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Synopsys Inc. intangible assets, net amount decreased from 2022 to 2023 and from 2023 to 2024.
Goodwill and intangible assets	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Synopsys Inc. goodwill and intangible assets increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.

Synopsys Inc., adjustments to financial statements

US$ in thousands

	Oct 31, 2024	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
Adjustment to Total Assets
Total assets (as reported)	13,073,561)	10,333,131)	9,418,087)	8,752,260)	8,030,062)	6,405,160)
Less: Goodwill	3,448,850)	4,070,336)	3,842,234)	3,575,785)	3,365,114)	3,171,179)
Total assets (adjusted)	9,624,711)	6,262,795)	5,575,853)	5,176,475)	4,664,948)	3,233,981)
Adjustment to Total Synopsys Stockholders’ Equity
Total Synopsys stockholders’ equity (as reported)	8,990,702)	6,147,308)	5,515,725)	5,295,137)	4,907,404)	4,083,013)
Less: Goodwill	3,448,850)	4,070,336)	3,842,234)	3,575,785)	3,365,114)	3,171,179)
Total Synopsys stockholders’ equity (adjusted)	5,541,852)	2,076,972)	1,673,491)	1,719,352)	1,542,290)	911,834)

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

Synopsys Inc., Financial Data: Reported vs. Adjusted

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Synopsys Inc., adjusted financial ratios

	Oct 31, 2024	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
Total Asset Turnover
Reported total asset turnover	0.47	0.57	0.54	0.48	0.46	0.52
Adjusted total asset turnover	0.64	0.93	0.91	0.81	0.79	1.04
Financial Leverage
Reported financial leverage	1.45	1.68	1.71	1.65	1.64	1.57
Adjusted financial leverage	1.74	3.02	3.33	3.01	3.02	3.55
Return on Equity (ROE)
Reported ROE	25.17%	20.01%	17.85%	14.31%	13.54%	13.04%
Adjusted ROE	40.84%	59.22%	58.83%	44.06%	43.08%	58.38%
Return on Assets (ROA)
Reported ROA	17.31%	11.90%	10.45%	8.66%	8.27%	8.31%
Adjusted ROA	23.52%	19.64%	17.66%	14.63%	14.24%	16.46%

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

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Synopsys Inc. adjusted total asset turnover ratio improved from 2022 to 2023 but then deteriorated significantly 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.	Synopsys 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.	Synopsys Inc. adjusted ROE improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Synopsys Inc. adjusted ROA improved from 2022 to 2023 and from 2023 to 2024.

Synopsys Inc., Financial Ratios: Reported vs. Adjusted

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	Oct 31, 2024	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Revenue	6,127,436)	5,842,619)	5,081,542)	4,204,193)	3,685,281)	3,360,694)
Total assets	13,073,561)	10,333,131)	9,418,087)	8,752,260)	8,030,062)	6,405,160)
Activity Ratio
Total asset turnover¹	0.47	0.57	0.54	0.48	0.46	0.52
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Revenue	6,127,436)	5,842,619)	5,081,542)	4,204,193)	3,685,281)	3,360,694)
Adjusted total assets	9,624,711)	6,262,795)	5,575,853)	5,176,475)	4,664,948)	3,233,981)
Activity Ratio
Adjusted total asset turnover²	0.64	0.93	0.91	0.81	0.79	1.04

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

2024 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 6,127,436 ÷ 13,073,561 = 0.47

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 6,127,436 ÷ 9,624,711 = 0.64

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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.	Synopsys Inc. adjusted total asset turnover ratio improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.

	Oct 31, 2024	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Total assets	13,073,561)	10,333,131)	9,418,087)	8,752,260)	8,030,062)	6,405,160)
Total Synopsys stockholders’ equity	8,990,702)	6,147,308)	5,515,725)	5,295,137)	4,907,404)	4,083,013)
Solvency Ratio
Financial leverage¹	1.45	1.68	1.71	1.65	1.64	1.57
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets	9,624,711)	6,262,795)	5,575,853)	5,176,475)	4,664,948)	3,233,981)
Adjusted total Synopsys stockholders’ equity	5,541,852)	2,076,972)	1,673,491)	1,719,352)	1,542,290)	911,834)
Solvency Ratio
Adjusted financial leverage²	1.74	3.02	3.33	3.01	3.02	3.55

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

2024 Calculations

¹ Financial leverage = Total assets ÷ Total Synopsys stockholders’ equity
= 13,073,561 ÷ 8,990,702 = 1.45

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Synopsys stockholders’ equity
= 9,624,711 ÷ 5,541,852 = 1.74

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

	Oct 31, 2024	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income attributed to Synopsys	2,263,380)	1,229,888)	984,594)	757,516)	664,347)	532,367)
Total Synopsys stockholders’ equity	8,990,702)	6,147,308)	5,515,725)	5,295,137)	4,907,404)	4,083,013)
Profitability Ratio
ROE¹	25.17%	20.01%	17.85%	14.31%	13.54%	13.04%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income attributed to Synopsys	2,263,380)	1,229,888)	984,594)	757,516)	664,347)	532,367)
Adjusted total Synopsys stockholders’ equity	5,541,852)	2,076,972)	1,673,491)	1,719,352)	1,542,290)	911,834)
Profitability Ratio
Adjusted ROE²	40.84%	59.22%	58.83%	44.06%	43.08%	58.38%

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

2024 Calculations

¹ ROE = 100 × Net income attributed to Synopsys ÷ Total Synopsys stockholders’ equity
= 100 × 2,263,380 ÷ 8,990,702 = 25.17%

² Adjusted ROE = 100 × Net income attributed to Synopsys ÷ Adjusted total Synopsys stockholders’ equity
= 100 × 2,263,380 ÷ 5,541,852 = 40.84%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Synopsys Inc. adjusted ROE improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.

	Oct 31, 2024	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income attributed to Synopsys	2,263,380)	1,229,888)	984,594)	757,516)	664,347)	532,367)
Total assets	13,073,561)	10,333,131)	9,418,087)	8,752,260)	8,030,062)	6,405,160)
Profitability Ratio
ROA¹	17.31%	11.90%	10.45%	8.66%	8.27%	8.31%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income attributed to Synopsys	2,263,380)	1,229,888)	984,594)	757,516)	664,347)	532,367)
Adjusted total assets	9,624,711)	6,262,795)	5,575,853)	5,176,475)	4,664,948)	3,233,981)
Profitability Ratio
Adjusted ROA²	23.52%	19.64%	17.66%	14.63%	14.24%	16.46%

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

2024 Calculations

¹ ROA = 100 × Net income attributed to Synopsys ÷ Total assets
= 100 × 2,263,380 ÷ 13,073,561 = 17.31%

² Adjusted ROA = 100 × Net income attributed to Synopsys ÷ Adjusted total assets
= 100 × 2,263,380 ÷ 9,624,711 = 23.52%

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

Synopsys Inc. (NASDAQ:SNPS)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Synopsys Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Synopsys Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)