Stock Analysis on Net

Eaton Corp. plc (NYSE:ETN)

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

Eaton Corp. plc, balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Goodwill 14,713 14,977 14,796 14,751 12,903
Trademarks 1,200 1,207 1,201 1,374 1,382
Intangible assets not subject to amortization 1,200 1,207 1,201 1,374 1,382
Customer relationships 4,659 4,742 4,677 4,752 3,415
Patents and technology 1,979 1,990 1,987 1,879 1,428
Trademarks 1,107 1,123 1,113 951 970
Other 169 176 175 165 91
Intangible assets subject to amortization, historical cost 7,914 8,031 7,952 7,747 5,904
Accumulated amortization (4,456) (4,147) (3,668) (3,266) (3,111)
Intangible assets subject to amortization, net 3,458 3,884 4,284 4,481 2,793
Other intangible assets 4,658 5,091 5,485 5,855 4,175
Goodwill and other intangible assets 19,371 20,068 20,281 20,606 17,078

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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. Eaton Corp. plc goodwill increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.
Other intangible assets Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Eaton Corp. plc other intangible assets decreased from 2022 to 2023 and from 2023 to 2024.
Goodwill and other 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. Eaton Corp. plc goodwill and other intangible assets decreased from 2022 to 2023 and from 2023 to 2024.

Adjustments to Financial Statements: Removal of Goodwill

Eaton Corp. plc, adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Adjustment to Total Assets
Total assets (as reported) 38,381 38,432 35,014 34,027 31,824
Less: Goodwill 14,713 14,977 14,796 14,751 12,903
Total assets (adjusted) 23,668 23,455 20,218 19,276 18,921
Adjustment to Total Eaton Shareholders’ Equity
Total Eaton shareholders’ equity (as reported) 18,488 19,036 17,038 16,413 14,930
Less: Goodwill 14,713 14,977 14,796 14,751 12,903
Total Eaton shareholders’ equity (adjusted) 3,775 4,059 2,242 1,662 2,027

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).


Eaton Corp. plc, Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Goodwill (Summary)

Eaton Corp. plc, adjusted financial ratios

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Total Asset Turnover
Reported total asset turnover 0.65 0.60 0.59 0.58 0.56
Adjusted total asset turnover 1.05 0.99 1.03 1.02 0.94
Financial Leverage
Reported financial leverage 2.08 2.02 2.06 2.07 2.13
Adjusted financial leverage 6.27 5.78 9.02 11.60 9.33
Return on Equity (ROE)
Reported ROE 20.52% 16.90% 14.45% 13.06% 9.44%
Adjusted ROE 100.50% 79.28% 109.81% 129.00% 69.56%
Return on Assets (ROA)
Reported ROA 9.89% 8.37% 7.03% 6.30% 4.43%
Adjusted ROA 16.03% 13.72% 12.18% 11.12% 7.45%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Eaton Corp. plc adjusted total asset turnover ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.
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.
Eaton Corp. plc adjusted financial leverage ratio decreased from 2022 to 2023 but then slightly increased from 2023 to 2024.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Eaton Corp. plc adjusted ROE deteriorated from 2022 to 2023 but then improved from 2023 to 2024 not reaching 2022 level.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Eaton Corp. plc adjusted ROA improved from 2022 to 2023 and from 2023 to 2024.

Eaton Corp. plc, Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net sales 24,878 23,196 20,752 19,628 17,858
Total assets 38,381 38,432 35,014 34,027 31,824
Activity Ratio
Total asset turnover1 0.65 0.60 0.59 0.58 0.56
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net sales 24,878 23,196 20,752 19,628 17,858
Adjusted total assets 23,668 23,455 20,218 19,276 18,921
Activity Ratio
Adjusted total asset turnover2 1.05 0.99 1.03 1.02 0.94

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 24,878 ÷ 38,381 = 0.65

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 24,878 ÷ 23,668 = 1.05

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Eaton Corp. plc adjusted total asset turnover ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Total assets 38,381 38,432 35,014 34,027 31,824
Total Eaton shareholders’ equity 18,488 19,036 17,038 16,413 14,930
Solvency Ratio
Financial leverage1 2.08 2.02 2.06 2.07 2.13
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 23,668 23,455 20,218 19,276 18,921
Adjusted total Eaton shareholders’ equity 3,775 4,059 2,242 1,662 2,027
Solvency Ratio
Adjusted financial leverage2 6.27 5.78 9.02 11.60 9.33

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 Financial leverage = Total assets ÷ Total Eaton shareholders’ equity
= 38,381 ÷ 18,488 = 2.08

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Eaton shareholders’ equity
= 23,668 ÷ 3,775 = 6.27

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.
Eaton Corp. plc adjusted financial leverage ratio decreased from 2022 to 2023 but then slightly increased from 2023 to 2024.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Eaton ordinary shareholders 3,794 3,218 2,462 2,144 1,410
Total Eaton shareholders’ equity 18,488 19,036 17,038 16,413 14,930
Profitability Ratio
ROE1 20.52% 16.90% 14.45% 13.06% 9.44%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to Eaton ordinary shareholders 3,794 3,218 2,462 2,144 1,410
Adjusted total Eaton shareholders’ equity 3,775 4,059 2,242 1,662 2,027
Profitability Ratio
Adjusted ROE2 100.50% 79.28% 109.81% 129.00% 69.56%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 ROE = 100 × Net income attributable to Eaton ordinary shareholders ÷ Total Eaton shareholders’ equity
= 100 × 3,794 ÷ 18,488 = 20.52%

2 Adjusted ROE = 100 × Net income attributable to Eaton ordinary shareholders ÷ Adjusted total Eaton shareholders’ equity
= 100 × 3,794 ÷ 3,775 = 100.50%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Eaton Corp. plc adjusted ROE deteriorated from 2022 to 2023 but then improved from 2023 to 2024 not reaching 2022 level.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Eaton ordinary shareholders 3,794 3,218 2,462 2,144 1,410
Total assets 38,381 38,432 35,014 34,027 31,824
Profitability Ratio
ROA1 9.89% 8.37% 7.03% 6.30% 4.43%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to Eaton ordinary shareholders 3,794 3,218 2,462 2,144 1,410
Adjusted total assets 23,668 23,455 20,218 19,276 18,921
Profitability Ratio
Adjusted ROA2 16.03% 13.72% 12.18% 11.12% 7.45%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 ROA = 100 × Net income attributable to Eaton ordinary shareholders ÷ Total assets
= 100 × 3,794 ÷ 38,381 = 9.89%

2 Adjusted ROA = 100 × Net income attributable to Eaton ordinary shareholders ÷ Adjusted total assets
= 100 × 3,794 ÷ 23,668 = 16.03%

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