- Goodwill and Intangible Asset Disclosure
- Adjustments to Financial Statements: Removal of Goodwill
- Adjusted Financial Ratios: Removal of Goodwill (Summary)
- Adjusted Net Profit Margin
- Adjusted Total Asset Turnover
- Adjusted Financial Leverage
- Adjusted Return on Equity (ROE)
- Adjusted Return on Assets (ROA)
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- Statement of Comprehensive Income
- Common-Size Income Statement
- Analysis of Profitability Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Net Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
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Goodwill and Intangible Asset Disclosure
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
The data exhibits notable fluctuations and general trends across various intangible asset categories over the five-year period ending December 31, 2019.
- Developed Technology
- Initially, developed technology assets increased significantly from US$2,062 million in 2015 to a peak of US$7,761 million in 2018. However, a sharp decline occurred in 2019, with the value dropping to US$4,343 million, suggesting a possible impairment or divestiture.
- Software
- Software assets showed steady, moderate growth from US$1,253 million in 2015 to US$1,529 million in 2018. Data for 2019 is missing, preventing further trend analysis for this asset class.
- Trademarks/Tradenames
- Trademarks and tradenames demonstrated a substantial increase in 2017, rising from US$696 million in 2016 to US$1,814 million. The value remained relatively stable in 2018 before increasing to US$2,433 million in 2019, indicating strengthening brand-related intangible assets.
- Customer-related Intangibles
- Customer-related assets exhibited a pronounced surge, escalating from US$3,164 million in 2015 to US$14,537 million in 2017. Following this peak, a slight decline occurred through 2019, falling to US$8,986 million, suggesting possible amortization or divestiture impacting these relationships.
- Microbial Cell Factories and Favorable Supply Contracts
- These newer categories appeared in the data starting 2017 with modest amounts (US$397 million and US$495 million respectively), and remained fairly stable through 2018. Both categories had no data in 2019, indicating potential classification changes or asset sales.
- Other Intangible Assets
- This category broadly rose from US$165 million in 2015 to US$703 million in 2017, followed by a decline to US$303 million by 2019, which could be due to amortization or reclassification of these assets.
- Intangible Assets With Finite Lives (Gross and Net)
- The gross carrying amount for finite-lived intangible assets increased sharply from US$7,310 million in 2015 to US$26,993 million in 2017, then slightly declined to US$16,065 million by 2019. Accumulated amortization rose progressively to US$7,414 million by 2018 before receding; net finite-lived intangibles followed a similar pattern, peaking in 2017 at US$21,443 million and decreasing afterward, reflecting ongoing amortization and impairment.
- In-Process Research and Development (IPR&D)
- IPR&D values fluctuated, starting at US$77 million in 2015, dipping slightly in 2016, then peaking at US$710 million in 2017, followed by a decrease in 2018. Data for 2019 is unavailable, limiting conclusions beyond 2018.
- Germplasm and Related Intangibles
- These assets were first recorded in 2017 at substantial amounts (US$6,265 million), remaining stable through 2018, with no data for 2019. Trademarks/tradenames related to this segment also saw significant valuation in 2017 and 2018 but declined notably by 2019.
- Intangible Assets With Indefinite Lives
- This category showed a notable increase from US$77 million in 2015 to US$11,831 million in 2017, holding steady through 2018 before dropping sharply to US$1,671 million in 2019, which may indicate asset reclassification or impairment.
- Other Intangible Assets Aggregate
- Total other intangible assets surged from US$3,617 million in 2015 to a peak of US$33,274 million in 2017, followed by a gradual decline to US$13,593 million in 2019, consistent with trends in underlying intangible components.
- Goodwill and Combined Goodwill and Other Intangibles
- Goodwill demonstrated considerable growth from US$12,154 million in 2015 to US$59,527 million in 2017, remaining largely stable through 2018 before falling sharply to US$33,151 million in 2019. Similarly, the aggregate of goodwill and other intangibles peaked near US$92,801 million in 2017 and declined to US$46,744 million by 2019, reflecting potential asset impairments or portfolio changes.
In summary, the data reveals a peak in intangible asset valuations around 2017, followed by declines towards 2019 in many categories. The growth up to 2017 likely reflects acquisition activity or capital investments, while the subsequent decreases suggest amortization, impairments, or strategic asset disposals. The volatility in goodwill and indefinite-lived intangibles is particularly pronounced, implying significant shifts in asset portfolios or revaluations during the later periods.
Adjustments to Financial Statements: Removal of Goodwill
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
The analysis of the financial data reveals notable fluctuations in the asset base, equity, and net income figures over the five-year period. The distinction between reported and adjusted values, especially regarding goodwill adjustments, highlights the impact of intangible asset valuations on the financial statements.
- Total Assets
- Reported total assets exhibited a significant increase from 68,026 million US dollars in 2015 to a peak of 192,164 million US dollars in 2017, followed by a slight decline to 188,030 million in 2018 and a steep drop to 69,396 million in 2019. The adjusted total assets, which exclude goodwill and other intangible assets, followed a similar trend but at a consistently lower level. The adjusted assets rose from 55,872 million in 2015 to 132,637 million in 2017, then decreased to 128,998 million in 2018 and sharply down to 36,245 million in 2019.
- Stockholders' Equity
- Reported total DuPont stockholders’ equity increased steadily from 25,374 million in 2015 to a substantial 100,330 million in 2017, then decreased slightly to 94,571 million in 2018, followed by a marked decline to 40,987 million in 2019. The adjusted total equity, reflecting the removal of goodwill and other intangibles, followed a decreasing pattern beginning with 13,220 million in 2015, dipping to 10,715 million in 2016, then rising to 40,803 million in 2017 before dropping again to 35,539 million in 2018 and further to 7,836 million in 2019. This pattern indicates that goodwill and intangible assets had a significant impact on reported equity, especially in the years 2017 and onward.
- Net Income Attributable to DuPont
- The reported net income displayed a declining trend from 7,685 million in 2015 to 1,460 million in 2017, with a recovery to 3,844 million in 2018 and a significant decrease to 498 million in 2019. When adjusted, net income was somewhat higher in some years, notably 2017, where the adjusted net income was nearly double the reported figure (2,951 million versus 1,460 million). This suggests that adjustments for goodwill and related items had a positive effect on net income in 2017 and 2019, indicating impairment or amortization expenses impacting the reported figures.
Overall, the data shows a pronounced increase in assets and equity around 2017, likely due to accounting changes or significant business events affecting goodwill values. The subsequent decreases in 2018 and more notably in 2019 highlight a period of contraction or write-down of intangible assets. Net income trends reflect volatility with improvements seen when adjusted for goodwill effects, indicating that underlying operational performance may be more stable than reported earnings suggest.
DuPont de Nemours Inc., Financial Data: Reported vs. Adjusted
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- Net Profit Margin
- The reported net profit margin shows a significant decreasing trend from 15.76% in 2015 to 2.31% in 2019, with a notable dip in 2017 reaching 2.34%. In contrast, the adjusted net profit margin, which accounts for goodwill adjustments, demonstrates improvement post-2016, rising from 4.72% in 2017 and peaking at 7.78% in 2019. This indicates that when goodwill is adjusted out, profitability appears stronger and improves over time.
- Total Asset Turnover
- Reported total asset turnover experiences a decline from 0.72 in 2015 to 0.31 in 2019, with a slight recovery in 2018 at 0.46. The adjusted asset turnover, however, consistently remains higher than the reported values, showing a decrease from 0.87 in 2015 to 0.47 in 2017, followed by an increase up to 0.67 in 2018 and a minor decline to 0.59 in 2019. The adjusted figures suggest a more efficient use of assets compared to the reported numbers, especially after 2017.
- Financial Leverage
- Reported financial leverage decreases steadily from 2.68 in 2015 to 1.69 in 2019, indicating a reduction in reliance on debt or liabilities. Conversely, adjusted financial leverage remains markedly higher than the reported figures across all years, ranging between 3.25 in 2017 and 6.00 in 2016, and rises again to 4.63 by 2019. This disparity implies that when excluding goodwill, the company’s financial leverage is substantially elevated, suggesting greater leverage risk than indicated by reported data.
- Return on Equity (ROE)
- Reported ROE declines sharply from 30.29% in 2015 to 1.22% in 2019, with the lowest point in 2017 at 1.46%. Adjusted ROE shows a similar downward pattern initially but remains significantly higher, dropping from 58.13% in 2015 to 7.23% in 2017, then recovering to 21.35% in 2019. This indicates that the company’s ability to generate profits from shareholders’ equity is considerably better when goodwill is adjusted out, with some recovery in later years.
- Return on Assets (ROA)
- Reported ROA sees a steep decline from 11.3% in 2015 to 0.72% in 2019, reaching a minimum in 2017 at 0.76%. Adjusted ROA follows a similar trend but at higher levels, starting at 13.75% in 2015 and declining to 2.22% in 2017 before rising to 4.62% in 2019. This suggests that the company’s efficiency in generating profit from assets is more favorable when adjusted for goodwill, showing gradual improvement towards the end of the period.
- Overall Analysis
- The comparison between reported and goodwill-adjusted data reveals that the presence of goodwill significantly impacts the company’s financial ratios, generally understating profitability, asset efficiency, and leverage when included. The downward trends in reported profitability and returns over the period may be partially offset by the adjusted figures, which indicate stronger performance and efficiency once goodwill is excluded. Financial leverage is notably understated in reported data, implying a higher risk profile not fully captured without adjustment. The company shows signs of recovery in adjusted metrics from 2017 onwards, highlighting the importance of goodwill adjustments in providing a clearer view of financial health.
DuPont de Nemours Inc., Financial Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
2019 Calculations
1 Net profit margin = 100 × Net income attributable to DuPont ÷ Net sales
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income attributable to DuPont ÷ Net sales
= 100 × ÷ =
- Net Income Trends
- Reported net income attributable to DuPont exhibited a significant decline from 7,685 million USD in 2015 to 498 million USD in 2019. The most pronounced drop occurred between 2016 and 2017, with reported net income falling from 4,318 million USD to 1,460 million USD. A partial recovery was observed in 2018 with reported net income increasing to 3,844 million USD before decreasing again in 2019.
- Adjusted net income shows a less steep decline compared to reported net income. It decreased from 7,685 million USD in 2015 to 1,673 million USD in 2019, with a notable improvement in 2017 to 2,951 million USD compared to the reported figure for the same year. This suggests adjustments, likely related to goodwill or other one-off items, positively affected the net income figure in that period.
- Profit Margin Analysis
- Reported net profit margin closely follows the trend seen in net income figures. It decreased sharply from 15.76% in 2015 to 2.31% in 2019. The margin was particularly low in 2017 at 2.34%, then improved slightly in 2018 before dropping again in 2019.
- Adjusted net profit margin provides a different perspective, showing higher margins for most years compared to the reported margins, especially in 2017 where it nearly doubled from 2.34% to 4.72%. By 2019, adjusted net profit margin increased to 7.78%, which is significantly higher than the reported 2.31%, indicating that adjustments have a meaningful positive impact on reported profitability metrics.
- Overall Insights
- The data indicates a period of financial stress or restructuring for the company, reflected in declining reported net income and profit margins over the five-year period. However, adjusted figures suggest that non-recurring charges or goodwill-related adjustments substantially affect the financial results. The adjusted metrics paint a more favorable profitability picture, especially from 2017 onward, highlighting the importance of considering adjusted figures for a comprehensive understanding of underlying financial performance.
Adjusted Total Asset Turnover
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
2019 Calculations
1 Total asset turnover = Net sales ÷ Total assets
= ÷ =
2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= ÷ =
The financial data reveals notable fluctuations in both reported and adjusted total assets over the five-year period. Reported total assets increased markedly from 2015 to 2017, peaking at a high point before declining sharply in 2019. Adjusted total assets, which exclude goodwill, follow a similar pattern but at lower absolute values, showing a substantial increase until 2017 and then a pronounced decrease by the end of 2019.
Regarding asset turnover ratios, both reported and adjusted figures demonstrate a downward trend overall, though the adjusted total asset turnover ratio consistently remains higher than the reported ratio across all periods. Specifically, the reported total asset turnover ratio declines significantly from 0.72 in 2015 to 0.31 in 2019, indicating a decrease in efficiency in utilizing assets to generate sales when goodwill is included. The adjusted total asset turnover, which provides a perspective excluding goodwill effects, also falls from 0.87 to 0.59 over the same period, but exhibits a less steep decline and a partial recovery between 2018 and 2019.
This divergence between reported and adjusted totals suggests that goodwill has a material impact on the company's asset base, influencing turnover metrics and potentially obscuring operational efficiency. The sharp asset growth noted in 2017 in both reported and adjusted measures may indicate significant acquisitions or asset revaluations, followed by divestitures or impairments contributing to the decline by 2019. The overall pattern points to variability in asset management effectiveness and implies a need to monitor the quality and composition of assets to better assess operational performance.
Adjusted Financial Leverage
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
2019 Calculations
1 Financial leverage = Total assets ÷ Total DuPont stockholders’ equity
= ÷ =
2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total DuPont stockholders’ equity
= ÷ =
- Total Assets
- The reported total assets exhibited notable fluctuation over the five-year period. Initially increasing from 68,026 million USD in 2015 to a peak of 192,164 million USD in 2017, the figure then declined to 69,396 million USD by 2019. A similar pattern is observed in the adjusted total assets, which rose from 55,872 million USD in 2015 to 132,637 million USD in 2017, before decreasing substantially to 36,245 million USD in 2019. This suggests significant changes in asset composition or valuation adjustments, particularly relating to goodwill.
- Stockholders’ Equity
- The reported total stockholders’ equity more than tripled from 25,374 million USD in 2015 to 100,330 million USD in 2017, followed by a decline to 40,987 million USD in 2019. The adjusted equity, which excludes goodwill, demonstrated a different trend, decreasing steadily from 13,220 million USD in 2015 to 7,836 million USD in 2019 after peaking at 40,803 million USD in 2017. This contrast between reported and adjusted figures suggests significant goodwill impairment or revaluation affecting equity during this timeframe.
- Financial Leverage
- Reported financial leverage ratios started at 2.68 in 2015, increased to a high of 3.06 in 2016, before declining steadily to 1.69 by 2019. This indicates a reduction in reported debt relative to equity over time. Conversely, the adjusted financial leverage, which considers equity net of goodwill, was significantly higher and more volatile, peaking at 6.00 in 2016, decreasing to 3.25 in 2017, increasing again to 4.63 in 2019. This pattern reflects greater reliance on financial leverage when goodwill is excluded, highlighting the impact of intangible assets on leverage metrics.
- Overall Insights
- The data reveals a peak in reported asset and equity values in 2017, likely influenced by accounting treatment of goodwill. Adjusted figures excluding goodwill indicate a more conservative financial position, with less pronounced growth and a decline in equity levels over the period. The divergence between reported and adjusted leverage ratios underscores the importance of considering intangible asset adjustments for a more accurate assessment of financial risk and capital structure dynamics.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
2019 Calculations
1 ROE = 100 × Net income attributable to DuPont ÷ Total DuPont stockholders’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income attributable to DuPont ÷ Adjusted total DuPont stockholders’ equity
= 100 × ÷ =
- Net Income Trends
- The reported net income attributable to the company experienced a significant decline from 7,685 million USD in 2015 to 498 million USD in 2019. The most pronounced drop occurred between 2016 and 2017, where net income fell sharply from 4,318 million USD to 1,460 million USD. Adjusted net income, which accounts for goodwill adjustments, shows a similar declining pattern but with less extreme decreases starting from 2017, indicating that adjustments help mitigate the volatility observed in reported figures. The adjusted net income showed a reduction from 7,685 million USD in 2015 to 1,673 million USD in 2019.
- Stockholders' Equity Developments
- Reported total stockholders’ equity exhibited a substantial increase between 2016 and 2017, climbing sharply from 25,987 million USD to 100,330 million USD, before declining to 40,987 million USD by 2019. The adjusted equity figures present a more conservative trend with values rising moderately until 2017, after which they gradually decreased to the lowest point of 7,836 million USD in 2019. The divergence between reported and adjusted equity suggests significant impact of goodwill or other non-operating items on reported equity, particularly evident in 2017 and subsequent periods.
- Return on Equity (ROE) Analysis
- Reported ROE followed a downward trajectory over the period, falling from a high of 30.29% in 2015 to a low of 1.22% in 2019. This decline correlates with the reduced net income and fluctuations in equity components. Adjusted ROE values, which exclude the effects of goodwill, indicate comparatively higher returns in the earlier years, peaking at 58.13% in 2015 and 40.3% in 2016, before declining to single-digit figures in 2017 and 2018. Notably, adjusted ROE increased again to 21.35% in 2019, suggesting improvement in core profitability when adjustments are considered.
- Summary of Insights
- The financial performance reflects considerable volatility, influenced significantly by goodwill and other reporting adjustments. While reported results show a pronounced deterioration in profitability and equity values post-2016, adjusted figures imply that underlying business performance may have been somewhat more stable, albeit still challenged during the period. The spike in reported equity in 2017 appears to be driven by accounting factors rather than operational improvements. The adjusted ROE pattern suggests that when isolating core earnings capacity, profitability remained moderate, with signs of recovery in 2019. Overall, the company faced declining net income and equity erosion, underscored by significant variations between reported and adjusted metrics.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
2019 Calculations
1 ROA = 100 × Net income attributable to DuPont ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income attributable to DuPont ÷ Adjusted total assets
= 100 × ÷ =
The financial data reveals significant fluctuations in both reported and adjusted figures for net income, total assets, and return on assets (ROA) over the analyzed five-year period.
- Net Income Trends
- Reported net income, measured in millions of US dollars, shows a marked decline from 7,685 in 2015 to 498 in 2019. There is a notable drop in 2017 to 1,460, followed by a modest recovery in 2018, and then a sharp decrease again in 2019. The adjusted net income figures follow a similar pattern but consistently exceed the reported net income from 2017 onwards, indicating adjustments that likely remove certain non-recurring or goodwill-related expenses. Adjusted net income declines from 7,685 in 2015 to 1,673 in 2019, showing somewhat less volatility but still a downward trend over the period.
- Total Assets Trends
- Reported total assets rise significantly from 68,026 million US dollars in 2015 to a peak of 192,164 million in 2017, followed by a slight decline to 188,030 million in 2018, and then a sharp decrease to 69,396 million in 2019. Adjusted total assets, which presumably exclude goodwill or other intangible assets, exhibit a parallel pattern but at lower absolute levels, increasing from 55,872 million in 2015 to 132,637 million in 2017, then decreasing steadily to 36,245 million in 2019. The drastic contraction in total assets after 2018 suggests possible asset disposals, divestitures, or revaluations impacting the asset base.
- Return on Assets (ROA) Analysis
- The reported ROA shows a declining trend from 11.3% in 2015 to below 1% in 2019, reflecting diminishing profitability relative to reported asset levels. Adjusted ROA, however, shows a less severe decline initially and even an increase in 2019 to 4.62%, surpassing the 2015 level on an adjusted basis. This difference suggests that when goodwill and adjustments are taken into account, the company's asset efficiency and profitability appear more favorable than the reported results indicate, particularly in the final year.
Overall, the data indicates substantial volatility and a downward trend in net income over the period, alongside a pronounced expansion and subsequent contraction of the asset base. Adjusted measures paint a less adverse picture, especially for profitability, highlighting the impact of goodwill and other adjustments on financial performance metrics. The improvements in adjusted ROA in the last reported year suggest some recovery in operational efficiency despite lower absolute income and asset levels.