Accenture PLC (NYSE:ACN)

Goodwill

Goodwill shows a consistent upward trend over the analyzed periods, increasing from approximately 7.7 billion US dollars in 2020 to about 22.5 billion US dollars in 2025. This suggests ongoing acquisitions or business growth that enhances the value recognized as goodwill on the balance sheet.

Customer-related Intangible Assets

The customer-related intangible assets also demonstrate a steady increase from around 1.3 billion US dollars in 2020 to nearly 3.7 billion US dollars in 2025. Although there is a slight decrease between 2024 and 2025, the overall trend reflects sustained investment in customer relationships or associated contractual rights.

Technology Intangible Assets

Technology assets experienced growth from 150 million US dollars in 2020 to over 335 million US dollars by 2024, followed by a modest decline to approximately 294 million US dollars in 2025. This pattern may imply technology asset acquisitions with occasional disposals or obsolescence in the most recent period.

Patents

Patent values demonstrate a gradual decline, decreasing from about 129 million US dollars in 2020 to around 115 million US dollars in 2025. This trend might indicate amortization exceeding new patent acquisitions or a reduction in patent portfolio valuation.

Other Intangible Assets

Other intangible assets show variability, with a decline from roughly 83 million US dollars in 2020 to about 63 million in 2022, then a notable increase to 150 million in 2024 before falling back to approximately 125 million in 2025. The fluctuations suggest discrete events impacting valuation, such as impairment or new intangible asset recognition.

Definite-lived Intangible Assets (Gross Carrying Amount)

There is a clear upward trajectory in the gross carrying amount of definite-lived intangible assets, growing from about 1.68 billion US dollars in 2020 to 4.53 billion in 2024, followed by a slight decrease to roughly 4.27 billion in 2025. The increase indicates acquisitions or capitalization of such assets, while the slight decrease may relate to disposals or reclassification.

Accumulated Amortization

Accumulated amortization rises consistently in absolute terms (noting the values are negative), from approximately -653 million US dollars in 2020 to nearly -1.86 billion US dollars in 2025. This reflects ongoing amortization expense reducing the book value of intangible assets over time.

Definite-lived Intangible Assets (Net Carrying Amount)

Net carrying amount of definite-lived intangible assets increases from about 1.03 billion US dollars in 2020 to 2.9 billion in 2024 before falling to approximately 2.41 billion in 2025. The net increase corresponds with the growth in gross assets partially offset by amortization, while the reduction in 2025 suggests higher amortization or asset impairment.

Goodwill and Intangible Assets (Total)

The aggregate balance of goodwill and intangible assets depicts substantial growth, rising from nearly 8.7 billion US dollars in 2020 to about 24 billion in 2024, followed by a smaller increase reaching approximately 24.95 billion in 2025. This indicates significant expansion in intangible asset recognition, reflecting business growth, acquisitions, or increased valuation of existing intangibles.

The financial data demonstrates an overall growth in reported total assets over the observed periods. Reported total assets increased consistently from US$37.1 billion in August 2020 to approximately US$65.4 billion in August 2025, indicating substantial asset expansion. In contrast, adjusted total assets, which exclude goodwill, also show an increasing trend but with more variability. They rose from approximately US$29.4 billion in August 2020 to US$42.9 billion in August 2025, with a slight dip noted around August 2024.

On the equity side, reported total shareholders’ equity experienced steady growth throughout the years, increasing from about US$17.0 billion in August 2020 to nearly US$31.2 billion in August 2025. This consistent upward movement reflects an improved net asset position and potentially higher retained earnings or capital inflows.

Conversely, adjusted total shareholders’ equity, which removes goodwill effects, shows a more fluctuating pattern. It decreased from approximately US$9.3 billion in August 2020 to about US$8.4 billion in August 2021 but then showed incremental improvements reaching US$10.1 billion by August 2023. However, a notable decline occurred in August 2024, dropping to around US$7.2 billion, before partially recovering to US$8.7 billion in August 2025. These movements suggest that the goodwill adjustments significantly impact equity values, implying variability in goodwill impairments or revaluations during the period.

The divergence between reported and adjusted figures, especially in shareholders’ equity, highlights the substantive role goodwill plays in the company’s financial structure. While reported data presents a robust upward trend in equity and asset bases, adjusted data portrays a more moderated growth trajectory with intermittent declines, signaling the influence of intangible asset accounting on the overall financial position.

In summary, the company exhibits sound asset and equity growth on a reported basis, while adjusted figures underline the volatility and risk associated with goodwill impairments or adjustments. This distinction is critical for stakeholders assessing the underlying asset quality and real value retained by the company over the analyzed periods.

Total Asset Turnover

The reported total asset turnover exhibited a slight fluctuation over the analyzed periods, beginning at 1.2 and gently declining to 1.07 by the final period. In contrast, the adjusted total asset turnover, which accounts for goodwill, demonstrated a generally upward trajectory, rising from 1.51 to a peak of 1.86 before tapering off slightly to 1.63. This suggests that when excluding the impact of goodwill, asset utilization efficiency improved more markedly.

Financial Leverage

The reported financial leverage ratio remained relatively stable with minor variation, hovering around 2.1 to 2.2, and slightly decreasing in the middle years before a modest rise towards the end. The adjusted financial leverage displayed greater volatility and an upward trend, increasing from 3.16 to a substantial 4.95 by the last period. This divergence indicates a significant influence of goodwill adjustments on leverage, implying that excluding goodwill assets reveals a considerably higher reliance on debt or equity financing.

Return on Equity (ROE)

Reported ROE showed a downward trend, peaking at 31.11% and subsequently declining to 24.61%. Conversely, the adjusted ROE, reflecting the removal of goodwill effects, was consistently higher and more variable, rising sharply from 54.98% to over 100% before settling near 88.68%. This pattern underscores substantially higher equity returns when goodwill is excluded, though it also indicates increased volatility or sensitivity in adjusted returns.

Return on Assets (ROA)

The reported ROA revealed a slight decline from 13.78% down to 11.74% over the periods. Adjusted ROA started higher at 17.39%, peaked at 20.87%, and then decreased to 17.92%. The adjusted metric consistently exceeded the reported figure, suggesting that the company’s asset profitability is notably improved under the goodwill adjustment, highlighting the possibly dilutive effect of goodwill on asset returns.

Overall Insights

The comparison between reported and adjusted financial metrics reveals that goodwill has a meaningful impact on performance ratios. Adjusted data generally indicate better asset utilization, greater leverage, and higher profitability metrics, signaling that excluding goodwill provides a more aggressive but potentially realistic view of financial efficiency and returns. Meanwhile, reported figures offer a more conservative perspective, showing modest declines in efficiency and profitability ratios in recent periods. The trends suggest a need for close monitoring of goodwill-related impacts on financial health and the implications for leverage and return volatility.

The analysis of the financial data reveals distinct patterns and trends in the company's reported and goodwill-adjusted asset metrics over the six-year period.

Total Assets

The reported total assets have consistently increased from 37,078,593 thousand US dollars in 2020 to 65,394,897 thousand US dollars in 2025. This steady growth indicates an expansion in the company's asset base over time.

Adjusted total assets, which exclude goodwill, also show an upward trend from 29,368,773 thousand US dollars in 2020 to 42,858,481 thousand US dollars in 2025. However, there is a minor decline in 2024 compared to 2023, suggesting some asset revaluation or disposals excluding goodwill in that year.

Total Asset Turnover

The reported total asset turnover ratio demonstrates minor fluctuations but a general decline overall. Starting at 1.2 in 2020, it peaked at 1.3 in 2022 before gradually decreasing to 1.07 by 2025. This trend implies that while the company’s reported assets have grown, the efficiency in generating revenue from these assets has slightly worsened in recent years.

The adjusted total asset turnover ratio presents a different pattern. It consistently increased from 1.51 in 2020 to a peak of 1.86 in 2024, followed by a slight decrease to 1.63 in 2025. The higher turnover rates relative to the reported figures suggest that when excluding goodwill, the company manages its core assets more efficiently in generating revenue. The peak in 2024 indicates a period of maximized asset utilization excluding goodwill, despite the slight drop afterward.

Comparative Insights

The disparity between reported and adjusted total assets highlights the significance of goodwill on the balance sheet. The adjusted figures grow at a slower rate, showing that a considerable portion of asset growth is attributable to goodwill or intangible assets. Meanwhile, the adjusted asset turnover consistently exceeds the reported turnover. This suggests that the operational assets excluding goodwill contribute more effectively to revenue generation.

In summary, the company demonstrates sustained asset growth with a more efficient use of tangible and intangible assets excluding goodwill, as evidenced by the adjusted asset turnover ratio. However, the overall decline in reported asset turnover indicates potential challenges in leveraging the entire asset base, including goodwill, to generate revenue at the same efficiency levels observed in earlier years.

Total Assets

There is a consistent upward trend in reported total assets over the six-year period, increasing steadily from approximately $37.1 billion in 2020 to around $65.4 billion in 2025. Adjusted total assets also exhibit growth but at a slower and less consistent rate, rising from roughly $29.4 billion in 2020 to about $42.9 billion in 2025, with a slight decrease observed in 2024.

Shareholders’ Equity

Reported shareholders’ equity shows continuous growth, rising from $17.0 billion in 2020 to nearly $31.2 billion in 2025, indicating strengthening equity base. Conversely, adjusted shareholders’ equity fluctuates more noticeably, initially declining from $9.3 billion in 2020 to $8.4 billion in 2021, then increasing again to peaks around $10.1 billion in 2023 before dropping substantially to approximately $7.2 billion in 2024, followed by a recovery to $8.7 billion in 2025. This volatility suggests significant adjustments impacting the equity base.

Financial Leverage

The reported financial leverage ratio displays a moderate downward trend from 2.18 in 2020 to a low of 1.98 in 2024, before a slight increase to 2.10 in 2025, indicating a gradual reduction in the reliance on debt relative to equity. In contrast, the adjusted financial leverage ratio remains considerably higher and more volatile, increasing from 3.16 in 2020 to 3.81 in 2021, stabilizing near 3.8 in 2022, decreasing somewhat to 3.52 in 2023, and then rising sharply to 4.86 in 2024 and 4.95 in 2025. This pattern implies a heavier debt load or reduced adjusted equity, particularly in the later years, reflecting a higher financial risk when considering adjustments.

Overall Insights

The reported figures suggest a company experiencing steady growth in asset size and equity, with a slight improvement in leverage indicating a stable financial position. Adjusted figures, which likely exclude goodwill or other intangible assets, reveal more conservative asset and equity levels and indicate increased financial leverage and volatility over time. The divergence between reported and adjusted data points to significant intangible assets affecting balance sheet composition and leverage assessments, underscoring the importance of considering adjusted metrics in evaluating financial health.

Shareholders’ Equity Trends

The reported total shareholders’ equity of the company shows a consistent upward trend from 17 billion USD in 2020 to approximately 31.2 billion USD in 2025. This represents strong growth over the six-year period, indicative of an improving financial position and accumulation of retained earnings or other equity components.

In contrast, the adjusted total shareholders’ equity, which likely excludes certain intangible assets such as goodwill, exhibits a fluctuating pattern. It starts at around 9.3 billion USD in 2020, declines to 8.4 billion USD in 2021, then rises moderately until 2023 before dropping sharply to approximately 7.2 billion USD in 2024. A rebound is observed in 2025, reaching close to 8.7 billion USD. This volatility suggests that adjustments for intangible assets significantly affect the equity base, and these adjustments vary materially year-over-year.

Return on Equity (ROE) Analysis

The reported ROE remains relatively stable but shows a gradual decline from 30.05% in 2020 to 24.61% in 2025. Although still indicative of strong profitability relative to equity, this downward trend might suggest increasing equity levels diluting returns or decreasing profitability margins on the reported equity base.

The adjusted ROE, which relates to the adjusted shareholders’ equity figure, presents a markedly different pattern. It increases sharply from 54.98% in 2020 to a peak of 76.64% in 2022, followed by some fluctuations, including a slight dip in 2023, and then a significant spike to over 100% in 2024 before decreasing to around 88.68% in 2025. These high ROE figures imply that the company generates substantial earnings relative to the adjusted equity base, which is smaller and more volatile due to the adjustments made.

Comparative Insights

The divergence between reported and adjusted figures highlights the impact of adjustments on evaluating equity and profitability. While reported equity steadily grows and ROE declines slightly, adjusted equity is much more volatile, and adjusted ROE is substantially higher and more erratic. This underscores the importance of considering both reported and adjusted measures when assessing the company's financial health and performance.

Overall, the company demonstrates growth in reported equity and maintains robust profitability, but the fluctuations in adjusted figures suggest underlying changes in asset composition and earnings efficiency relative to the adjusted capital base.

Total Assets

The reported total assets exhibit a continuous upward trend over the given periods, increasing from approximately 37.1 billion US dollars in 2020 to nearly 65.4 billion US dollars in 2025. This reflects significant asset growth over the six years. The goodwill adjusted total assets also increase overall, rising from around 29.4 billion US dollars in 2020 to approximately 42.9 billion US dollars in 2025. However, this adjusted figure shows a slight decrease between 2023 and 2024 before rebounding sharply in 2025.

Return on Assets (ROA)

The reported ROA maintains a relatively stable yet slightly declining trend through the years. It starts at 13.78% in 2020 and gradually decreases to 11.74% by 2025. This indicates a minor reduction in profitability relative to reported assets over time. Conversely, the adjusted ROA, which accounts for goodwill adjustment, demonstrates a more dynamic pattern. It begins at 17.39% in 2020, rises to a peak of 20.15% in 2022, and despite some fluctuations, remains relatively elevated at 17.92% in 2025. This suggests that when goodwill is excluded, asset profitability appears stronger and more variable but generally remains healthier than the reported metric.

Overall Observations

The divergence between reported and adjusted figures highlights the impact of goodwill on the company’s asset base and profitability metrics. The consistent asset growth aligns with typical expansion activities. Meanwhile, the adjusted ROA portrays a superior return performance compared to the reported ROA, indicating that intangible asset values may depress the apparent profitability when included. The slight downturn in reported ROA combined with growing total assets may warrant further analysis into the efficiency of asset utilization. Additionally, the fluctuation and eventual decline in adjusted total assets in one year, followed by a strong rebound, reflects possible impairment, write-offs, or other adjustments to goodwill or intangible assets that affect the adjusted base.