Stock Analysis on Net
Stock Analysis on Net

EMC Corp. (NYSE:EMC)

This company has been moved to the archive! The financial data has not been updated since August 8, 2016.

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

EMC Corp., balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
Purchased technology 3,272 2,935 2,356 2,233 1,621
Patents 225 225 225 225 225
Software licenses 112 108 101 96 90
Trademarks and tradenames 254 226 171 173 173
Customer relationships and customer lists 1,523 1,473 1,386 1,377 1,330
IPR&D — — — — 44
Leasehold interest 152 152 145 145 147
Other 46 44 28 26 30
Intangible assets, excluding goodwill, gross carrying amount 5,584 5,163 4,412 4,276 3,660
Accumulated amortization (3,435) (3,038) (2,632) (2,240) (1,894)
Intangible assets, excluding goodwill, net book value 2,149 2,125 1,780 2,035 1,766
Goodwill 17,090 16,134 14,424 13,840 12,155
Intangibles and goodwill 19,239 18,259 16,204 15,875 13,921

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

Item Description The company
Intangible assets, excluding goodwill, net book value Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. EMC Corp. intangible assets, excluding goodwill, net book value increased from 2013 to 2014 and from 2014 to 2015.
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. EMC Corp. goodwill increased from 2013 to 2014 and from 2014 to 2015.
Intangibles and goodwill Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. EMC Corp. intangibles and goodwill increased from 2013 to 2014 and from 2014 to 2015.

Adjustments to Financial Statements: Removal of Goodwill

EMC Corp., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
Adjustment to Total Assets
Total assets (as reported) 46,612 45,885 45,849 38,069 34,268
Less: Goodwill 17,090 16,134 14,424 13,840 12,155
Total assets (adjusted) 29,522 29,751 31,425 24,229 22,113
Adjustment to Total EMC Corporation’s Shareholders’ Equity
Total EMC Corporation’s shareholders’ equity (as reported) 21,140 21,896 22,301 22,357 18,959
Less: Goodwill 17,090 16,134 14,424 13,840 12,155
Total EMC Corporation’s shareholders’ equity (adjusted) 4,050 5,762 7,877 8,517 6,804

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

EMC Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

EMC Corp., adjusted financial ratios

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
Total Asset Turnover
Reported total asset turnover 0.53 0.53 0.51 0.57 0.58
Adjusted total asset turnover 0.84 0.82 0.74 0.90 0.90
Financial Leverage
Reported financial leverage 2.20 2.10 2.06 1.70 1.81
Adjusted financial leverage 7.29 5.16 3.99 2.84 3.25
Return on Equity (ROE)
Reported ROE 9.41% 12.39% 12.95% 12.22% 12.98%
Adjusted ROE 49.14% 47.10% 36.68% 32.08% 36.17%
Return on Assets (ROA)
Reported ROA 4.27% 5.91% 6.30% 7.18% 7.18%
Adjusted ROA 6.74% 9.12% 9.19% 11.28% 11.13%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. EMC Corp. adjusted total asset turnover ratio improved from 2013 to 2014 and from 2014 to 2015.
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.		 EMC Corp. adjusted financial leverage ratio increased from 2013 to 2014 and from 2014 to 2015.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. EMC Corp. adjusted ROE improved from 2013 to 2014 and from 2014 to 2015.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. EMC Corp. adjusted ROA deteriorated from 2013 to 2014 and from 2014 to 2015.

EMC Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Revenues 24,704 24,440 23,222 21,714 20,008
Total assets 46,612 45,885 45,849 38,069 34,268
Activity Ratio
Total asset turnover1 0.53 0.53 0.51 0.57 0.58
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenues 24,704 24,440 23,222 21,714 20,008
Adjusted total assets 29,522 29,751 31,425 24,229 22,113
Activity Ratio
Adjusted total asset turnover2 0.84 0.82 0.74 0.90 0.90

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 24,704 ÷ 46,612 = 0.53

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 24,704 ÷ 29,522 = 0.84

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. EMC Corp. adjusted total asset turnover ratio improved from 2013 to 2014 and from 2014 to 2015.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Total assets 46,612 45,885 45,849 38,069 34,268
Total EMC Corporation’s shareholders’ equity 21,140 21,896 22,301 22,357 18,959
Solvency Ratio
Financial leverage1 2.20 2.10 2.06 1.70 1.81
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 29,522 29,751 31,425 24,229 22,113
Adjusted total EMC Corporation’s shareholders’ equity 4,050 5,762 7,877 8,517 6,804
Solvency Ratio
Adjusted financial leverage2 7.29 5.16 3.99 2.84 3.25

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

1 Financial leverage = Total assets ÷ Total EMC Corporation’s shareholders’ equity
= 46,612 ÷ 21,140 = 2.20

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total EMC Corporation’s shareholders’ equity
= 29,522 ÷ 4,050 = 7.29

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.		 EMC Corp. adjusted financial leverage ratio increased from 2013 to 2014 and from 2014 to 2015.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to EMC Corporation 1,990 2,714 2,889 2,733 2,461
Total EMC Corporation’s shareholders’ equity 21,140 21,896 22,301 22,357 18,959
Profitability Ratio
ROE1 9.41% 12.39% 12.95% 12.22% 12.98%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to EMC Corporation 1,990 2,714 2,889 2,733 2,461
Adjusted total EMC Corporation’s shareholders’ equity 4,050 5,762 7,877 8,517 6,804
Profitability Ratio
Adjusted ROE2 49.14% 47.10% 36.68% 32.08% 36.17%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

1 ROE = 100 × Net income attributable to EMC Corporation ÷ Total EMC Corporation’s shareholders’ equity
= 100 × 1,990 ÷ 21,140 = 9.41%

2 Adjusted ROE = 100 × Net income attributable to EMC Corporation ÷ Adjusted total EMC Corporation’s shareholders’ equity
= 100 × 1,990 ÷ 4,050 = 49.14%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. EMC Corp. adjusted ROE improved from 2013 to 2014 and from 2014 to 2015.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to EMC Corporation 1,990 2,714 2,889 2,733 2,461
Total assets 46,612 45,885 45,849 38,069 34,268
Profitability Ratio
ROA1 4.27% 5.91% 6.30% 7.18% 7.18%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to EMC Corporation 1,990 2,714 2,889 2,733 2,461
Adjusted total assets 29,522 29,751 31,425 24,229 22,113
Profitability Ratio
Adjusted ROA2 6.74% 9.12% 9.19% 11.28% 11.13%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

1 ROA = 100 × Net income attributable to EMC Corporation ÷ Total assets
= 100 × 1,990 ÷ 46,612 = 4.27%

2 Adjusted ROA = 100 × Net income attributable to EMC Corporation ÷ Adjusted total assets
= 100 × 1,990 ÷ 29,522 = 6.74%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. EMC Corp. adjusted ROA deteriorated from 2013 to 2014 and from 2014 to 2015.