Inventory Disclosure
Adjustment to Inventory: Conversion from LIFO to FIFO
Adjusted Financial Ratios: LIFO vs. FIFO (Summary)
Adjusted Current Ratio
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Walgreens Boots Alliance Inc., balance sheet: inventory

US$ in millions

		Aug 31, 2019		Aug 31, 2018		Aug 31, 2017		Aug 31, 2016		Aug 31, 2015		Aug 31, 2014
	Inventories	9,333)		9,565)		8,899)		8,956)		8,678)		6,076)

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

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Item	Description	The company
Inventories	Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer.	Walgreens Boots Alliance Inc. inventories increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.

Adjusting LIFO Inventory to FIFO (Current) Cost

US$ in millions

	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
Adjustment to Inventories
Inventories at LIFO (as reported)	9,333)	9,565)	8,899)	8,956)	8,678)	6,076)
Add: Inventory LIFO reserve	3,200)	3,000)	3,000)	2,800)	2,500)	2,300)
Inventories at FIFO (adjusted)	12,533)	12,565)	11,899)	11,756)	11,178)	8,376)
Adjustment to Current Assets
Current assets (as reported)	18,700)	17,846)	19,753)	25,883)	19,657)	12,242)
Add: Inventory LIFO reserve	3,200)	3,000)	3,000)	2,800)	2,500)	2,300)
Current assets (adjusted)	21,900)	20,846)	22,753)	28,683)	22,157)	14,542)
Adjustment to Total Assets
Total assets (as reported)	67,598)	68,124)	66,009)	72,688)	68,782)	37,182)
Add: Inventory LIFO reserve	3,200)	3,000)	3,000)	2,800)	2,500)	2,300)
Total assets (adjusted)	70,798)	71,124)	69,009)	75,488)	71,282)	39,482)
Adjustment to Total Walgreens Boots Alliance, Inc. Shareholders’ Equity
Total Walgreens Boots Alliance, Inc. shareholders’ equity (as reported)	23,512)	26,007)	27,466)	29,880)	30,861)	20,457)
Add: Inventory LIFO reserve	3,200)	3,000)	3,000)	2,800)	2,500)	2,300)
Total Walgreens Boots Alliance, Inc. shareholders’ equity (adjusted)	26,712)	29,007)	30,466)	32,680)	33,361)	22,757)
Adjustment to Net Earnings Attributable To Walgreens Boots Alliance, Inc.
Net earnings attributable to Walgreens Boots Alliance, Inc. (as reported)	3,982)	5,024)	4,078)	4,173)	4,220)	1,932)
Add: Increase (decrease) in inventory LIFO reserve	200)	—)	200)	300)	200)	200)
Net earnings attributable to Walgreens Boots Alliance, Inc. (adjusted)	4,182)	5,024)	4,278)	4,473)	4,420)	2,132)

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

Walgreens Boots Alliance Inc. inventory value on Aug 31, 2019 would be $12,533) (in millions) if the FIFO inventory method was used instead of LIFO. Walgreens Boots Alliance Inc. inventories, valued on a LIFO basis, on Aug 31, 2019 were $9,333). Walgreens Boots Alliance Inc. inventories would have been $3,200) higher than reported on Aug 31, 2019 if the FIFO method had been used instead.

Walgreens Boots Alliance Inc., Financial Data: Reported vs. Adjusted

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Walgreens Boots Alliance Inc., adjusted financial ratios

	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
Current Ratio
Reported current ratio (LIFO)	0.73	0.82	1.07	1.52	1.19	1.38
Adjusted current ratio (FIFO)	0.85	0.96	1.23	1.69	1.34	1.63
Net Profit Margin
Reported net profit margin (LIFO)	2.91%	3.82%	3.45%	3.56%	4.08%	2.53%
Adjusted net profit margin (FIFO)	3.06%	3.82%	3.62%	3.81%	4.27%	2.79%
Total Asset Turnover
Reported total asset turnover (LIFO)	2.02	1.93	1.79	1.61	1.50	2.05
Adjusted total asset turnover (FIFO)	1.93	1.85	1.71	1.55	1.45	1.93
Financial Leverage
Reported financial leverage (LIFO)	2.88	2.62	2.40	2.43	2.23	1.82
Adjusted financial leverage (FIFO)	2.65	2.45	2.27	2.31	2.14	1.73
Return on Equity (ROE)
Reported ROE (LIFO)	16.94%	19.32%	14.85%	13.97%	13.67%	9.44%
Adjusted ROE (FIFO)	15.66%	17.32%	14.04%	13.69%	13.25%	9.37%
Return on Assets (ROA)
Reported ROA (LIFO)	5.89%	7.37%	6.18%	5.74%	6.14%	5.20%
Adjusted ROA (FIFO)	5.91%	7.06%	6.20%	5.93%	6.20%	5.40%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

Financial ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by current liabilities.	Walgreens Boots Alliance Inc. adjusted current ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Walgreens Boots Alliance Inc. adjusted net profit margin ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Walgreens Boots Alliance Inc. adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.
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.	Walgreens Boots Alliance Inc. adjusted financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Walgreens Boots Alliance Inc. adjusted ROE improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Walgreens Boots Alliance Inc. adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Walgreens Boots Alliance Inc., Financial Ratios: Reported vs. Adjusted

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	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Current assets	18,700)	17,846)	19,753)	25,883)	19,657)	12,242)
Current liabilities	25,769)	21,667)	18,547)	17,013)	16,557)	8,895)
Liquidity Ratio
Current ratio¹	0.73	0.82	1.07	1.52	1.19	1.38
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted current assets	21,900)	20,846)	22,753)	28,683)	22,157)	14,542)
Current liabilities	25,769)	21,667)	18,547)	17,013)	16,557)	8,895)
Liquidity Ratio
Adjusted current ratio²	0.85	0.96	1.23	1.69	1.34	1.63

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= 18,700 ÷ 25,769 = 0.73

² Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= 21,900 ÷ 25,769 = 0.85

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Liquidity ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by current liabilities.	Walgreens Boots Alliance Inc. adjusted current ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc.	3,982)	5,024)	4,078)	4,173)	4,220)	1,932)
Sales	136,866)	131,537)	118,214)	117,351)	103,444)	76,392)
Profitability Ratio
Net profit margin¹	2.91%	3.82%	3.45%	3.56%	4.08%	2.53%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc.	4,182)	5,024)	4,278)	4,473)	4,420)	2,132)
Sales	136,866)	131,537)	118,214)	117,351)	103,444)	76,392)
Profitability Ratio
Adjusted net profit margin²	3.06%	3.82%	3.62%	3.81%	4.27%	2.79%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

¹ Net profit margin = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Sales
= 100 × 3,982 ÷ 136,866 = 2.91%

² Adjusted net profit margin = 100 × Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Sales
= 100 × 4,182 ÷ 136,866 = 3.06%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Walgreens Boots Alliance Inc. adjusted net profit margin ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Sales	136,866)	131,537)	118,214)	117,351)	103,444)	76,392)
Total assets	67,598)	68,124)	66,009)	72,688)	68,782)	37,182)
Activity Ratio
Total asset turnover¹	2.02	1.93	1.79	1.61	1.50	2.05
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Sales	136,866)	131,537)	118,214)	117,351)	103,444)	76,392)
Adjusted total assets	70,798)	71,124)	69,009)	75,488)	71,282)	39,482)
Activity Ratio
Adjusted total asset turnover²	1.93	1.85	1.71	1.55	1.45	1.93

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

¹ Total asset turnover = Sales ÷ Total assets
= 136,866 ÷ 67,598 = 2.02

² Adjusted total asset turnover = Sales ÷ Adjusted total assets
= 136,866 ÷ 70,798 = 1.93

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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.	Walgreens Boots Alliance Inc. adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Total assets	67,598)	68,124)	66,009)	72,688)	68,782)	37,182)
Total Walgreens Boots Alliance, Inc. shareholders’ equity	23,512)	26,007)	27,466)	29,880)	30,861)	20,457)
Solvency Ratio
Financial leverage¹	2.88	2.62	2.40	2.43	2.23	1.82
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted total assets	70,798)	71,124)	69,009)	75,488)	71,282)	39,482)
Adjusted total Walgreens Boots Alliance, Inc. shareholders’ equity	26,712)	29,007)	30,466)	32,680)	33,361)	22,757)
Solvency Ratio
Adjusted financial leverage²	2.65	2.45	2.27	2.31	2.14	1.73

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

¹ Financial leverage = Total assets ÷ Total Walgreens Boots Alliance, Inc. shareholders’ equity
= 67,598 ÷ 23,512 = 2.88

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Walgreens Boots Alliance, Inc. shareholders’ equity
= 70,798 ÷ 26,712 = 2.65

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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.	Walgreens Boots Alliance Inc. adjusted financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.

	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc.	3,982)	5,024)	4,078)	4,173)	4,220)	1,932)
Total Walgreens Boots Alliance, Inc. shareholders’ equity	23,512)	26,007)	27,466)	29,880)	30,861)	20,457)
Profitability Ratio
ROE¹	16.94%	19.32%	14.85%	13.97%	13.67%	9.44%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc.	4,182)	5,024)	4,278)	4,473)	4,420)	2,132)
Adjusted total Walgreens Boots Alliance, Inc. shareholders’ equity	26,712)	29,007)	30,466)	32,680)	33,361)	22,757)
Profitability Ratio
Adjusted ROE²	15.66%	17.32%	14.04%	13.69%	13.25%	9.37%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

¹ ROE = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Total Walgreens Boots Alliance, Inc. shareholders’ equity
= 100 × 3,982 ÷ 23,512 = 16.94%

² Adjusted ROE = 100 × Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Adjusted total Walgreens Boots Alliance, Inc. shareholders’ equity
= 100 × 4,182 ÷ 26,712 = 15.66%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Walgreens Boots Alliance Inc. adjusted ROE improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.

	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc.	3,982)	5,024)	4,078)	4,173)	4,220)	1,932)
Total assets	67,598)	68,124)	66,009)	72,688)	68,782)	37,182)
Profitability Ratio
ROA¹	5.89%	7.37%	6.18%	5.74%	6.14%	5.20%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net earnings attributable to Walgreens Boots Alliance, Inc.	4,182)	5,024)	4,278)	4,473)	4,420)	2,132)
Adjusted total assets	70,798)	71,124)	69,009)	75,488)	71,282)	39,482)
Profitability Ratio
Adjusted ROA²	5.91%	7.06%	6.20%	5.93%	6.20%	5.40%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

2019 Calculations

¹ ROA = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Total assets
= 100 × 3,982 ÷ 67,598 = 5.89%

² Adjusted ROA = 100 × Adjusted net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Adjusted total assets
= 100 × 4,182 ÷ 70,798 = 5.91%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Walgreens Boots Alliance Inc. adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Walgreens Boots Alliance Inc. (NASDAQ:WBA)

Analysis of Inventory

Inventory Disclosure

Adjustment to Inventory: Conversion from LIFO to FIFO

Walgreens Boots Alliance Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: LIFO vs. FIFO (Summary)

Walgreens Boots Alliance Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)