Kellanova (NYSE:K)

Goodwill

The goodwill value exhibited a gradual decline over the analyzed period, decreasing from 5,861 million US dollars at the end of 2019 to 5,160 million US dollars by the end of 2023. This indicates a steady reduction in goodwill, which may reflect asset impairments, disposals, or adjustments to acquisition valuations.

Intangibles subject to amortization, gross amount

The gross amount of intangibles subject to amortization decreased consistently, from 594 million US dollars in late 2019 to 334 million US dollars at the end of 2023. This downward trend suggests ongoing amortization and potentially the disposal or write-off of intangible assets in this category.

Accumulated amortization

Accumulated amortization increased from -101 million US dollars in 2019 to a peak of -162 million US dollars in 2022, before slightly decreasing to -154 million US dollars in 2023. The general upward trend in accumulated amortization is consistent with continued amortization expense recognition over time, with the slight decrease in 2023 possibly due to asset disposals or adjustments.

Intangibles subject to amortization, net amount

The net amount of intangibles subject to amortization steadily declined from 493 million US dollars in 2019 to 180 million US dollars in 2023. This mirrors the reductions seen in both the gross amount and accumulated amortization, showing a consistent amortization effect reducing the net carrying value.

Intangibles not subject to amortization

Intangibles not subject to amortization showed a gradual decrease from 2,083 million US dollars in 2019 to 1,750 million US dollars in 2023. This decreasing pattern may indicate impairment charges, disposals, or reclassifications impacting these assets.

Other intangibles, net

The net balance of other intangibles declined steadily over the period, from 2,576 million US dollars at the end of 2019 to 1,930 million US dollars by 2023. This consistent downward trend suggests a reduction in intangible assets, influenced by amortization, impairments, or disposals.

Goodwill and other intangibles, net

The combined net value of goodwill and other intangibles decreased from 8,437 million US dollars in 2019 to 7,090 million US dollars in 2023. This overall decline reflects the cumulative effects of reductions across goodwill and intangible asset categories, which is indicative of asset write-downs, disposals, or amortization over the period.

The financial data reveals several notable trends over the period analyzed. Total assets, on a reported basis, exhibit moderate growth from 2019 through 2022, increasing from 17,564 million US dollars to a peak of 18,496 million US dollars. However, there is a significant decline in reported total assets in 2023, falling sharply to 15,621 million US dollars. This shift suggests a possible restructuring, asset sales, or revaluation impacting the asset base in the most recent year.

When examining adjusted total assets, which presumably exclude goodwill or other intangible adjustments, a similar pattern emerges. Adjusted assets grow steadily from 11,703 million US dollars in 2019 to 12,810 million US dollars in 2022, followed by a considerable decrease to 10,461 million US dollars in 2023. The adjusted figures remain consistently lower than the reported totals, indicating significant goodwill or intangible assets are present on the balance sheet.

Reported equity demonstrates consistent growth from 2,747 million US dollars in 2019 to 3,941 million US dollars in 2022, reinforcing a strengthening equity base during this period. Nonetheless, in 2023, reported equity decreases markedly to 3,175 million US dollars, which aligns with the downturn observed in total assets. This contraction could reflect losses, dividends, or other equity-reducing events.

Contrastingly, adjusted equity values are negative throughout the entire timeframe, ranging from -3,114 million US dollars in 2019 to a less negative -1,745 million US dollars in 2022, before moving back toward a more negative position of -1,985 million US dollars in 2023. The negative adjusted equity indicates that after removing goodwill or other intangible assets, liabilities exceed adjusted assets, suggesting potential balance sheet weaknesses or that the goodwill adjustments have a material impact on the equity position. The gradual improvement toward 2022 indicates some mitigation of this issue during the period, but the reversal in 2023 signals renewed pressure.

Overall, the data illustrates steady expansion in asset and equity bases from 2019 to 2022, followed by a pronounced contraction in 2023. The divergence between reported and adjusted figures, especially within equity, highlights the significant role of goodwill or intangible assets, raising considerations about asset quality and solvency under different accounting treatments.

Total Assets

Steady increase from 2019 to 2022, followed by notable decrease in 2023.

Reported values consistently higher than adjusted values, reflecting sizable goodwill or intangible assets.

Equity

Reported equity grows through 2022, then drops in 2023.

Adjusted equity remains negative throughout, showing liabilities surpass adjusted assets after intangible adjustments.

Improvement in adjusted equity until 2022 suggests some reduction of imbalance, but deterioration in 2023.

Insights

Goodwill and intangible asset adjustments materially affect balance sheet portrayal of equity strength.

Recent declines in both assets and equity may indicate operational or financial challenges beginning in 2023.

The analysis of the key financial ratios over the reported periods reveals distinct trends and adjustments that provide insight into the company's operational efficiency, leverage, and returns.

Total Asset Turnover

The reported total asset turnover ratio remained relatively stable from 2019 to 2021, hovering around 0.77 to 0.78, before increasing to 0.83 in 2022 and further to 0.84 in 2023. This suggests a gradual improvement in the company's efficiency in utilizing its assets to generate sales. The adjusted total asset turnover, which excludes goodwill effects, shows consistently higher values, indicating that intangible assets might be diluting the reported figure. This adjusted ratio follows a similar upward trend, starting at 1.16 in 2019, experiencing a slight dip to 1.13 in 2020, and then steadily increasing to 1.25 by 2023, highlighting continuous operational improvements.

Financial Leverage

The reported financial leverage ratio exhibits a declining trend from 6.39 in 2019 to 4.69 in 2022, with a minor increase to 4.92 in 2023. The decreasing leverage indicates a reduction in the reliance on debt or external financing over the period, enhancing financial stability. No adjusted financial leverage data is available, limiting further analysis on leverage adjustments excluding goodwill effects.

Return on Equity (ROE)

Reported ROE shows considerable variability, rising from 34.95% in 2019 to a peak of 40.2% in 2020, then remaining stable around 40% in 2021 before sharply declining to 24.36% in 2022. A partial recovery is noted in 2023 with ROE increasing to 29.95%. This pattern may reflect fluctuations in profitability or changes in capital structure during these years. Adjusted ROE data is not provided, restricting comparative interpretation.

Return on Assets (ROA)

The reported ROA follows a trajectory similar to ROE but at lower magnitudes, starting at 5.47% in 2019, increasing to 8.19% by 2021, then dropping to 5.19% in 2022, and increasing again to 6.09% in 2023. The adjusted ROA, which likely excludes the impact of goodwill, presents higher values consistently above the reported ROA, starting from 8.2% in 2019 to 11.99% in 2021, before declining to 7.49% in 2022 and recovering to 9.09% in 2023. This suggests that profitability on tangible assets is stronger than indicated by reported figures and that goodwill has a dilutive effect on reported returns.

The analysis of the financial data reveals distinct trends in both reported and adjusted total assets alongside their respective turnover ratios over the five-year period under review.

Total Assets

Reported total assets show a gradual increase from 17,564 million US dollars in 2019 to a peak of 18,496 million US dollars in 2022, followed by a significant decline to 15,621 million US dollars in 2023. This pattern suggests a period of asset growth culminating in a reduction during the last year observed.

Adjusted total assets, which exclude goodwill, similarly trend upward from 11,703 million US dollars in 2019 to 12,810 million US dollars in 2022, but then decline to 10,461 million US dollars in 2023. This mirrors the behavior of reported assets, though at a consistently lower magnitude due to the adjustment.

Total Asset Turnover

Reported total asset turnover remains relatively stable between 0.77 and 0.78 from 2019 through 2021, with a marked increase to 0.83 in 2022 and a slight further rise to 0.84 in 2023. This reflects an improvement in revenue generation relative to asset base in the latter years.

Adjusted total asset turnover exhibits a slight decline from 1.16 in 2019 to 1.13 in 2020, modestly recovering to 1.14 in 2021, followed by a notable increase to 1.20 in 2022 and continuing upward to 1.25 in 2023. The turnover ratios adjusted for goodwill demonstrate a stronger asset utilization efficiency compared to reported figures throughout the period, with progressive improvement in the most recent years.

In summary, the asset base expanded steadily before contracting in the final year, with a sharper decrease after goodwill adjustment. Concurrently, asset turnover ratios improved, indicating enhanced efficiency in utilizing assets to generate revenue, particularly when adjusted for goodwill. This suggests that the company has become more effective in leveraging its tangible and non-goodwill assets, despite the reduction in overall asset size toward the end of the period.

The financial data over the observed five-year period reveals several notable trends in the company's asset base, equity position, and leverage ratios, both in reported and adjusted terms.

Total Assets

The reported total assets showed a generally increasing trend from 2019 to 2022, rising from 17,564 million US dollars to 18,496 million US dollars, before declining significantly to 15,621 million US dollars in 2023. The adjusted total assets also followed a similar pattern but at a consistently lower absolute level, increasing from 11,703 million US dollars in 2019 to a peak of 12,810 million US dollars in 2022, then decreasing to 10,461 million US dollars in 2023. This indicates a downward adjustment, likely reflecting goodwill or intangible asset write-downs, and suggests a contraction in the asset base in the most recent year.

Total Equity

Reported total equity increased steadily from 2,747 million US dollars in 2019 to 3,941 million US dollars in 2022, followed by a decline to 3,175 million US dollars in 2023. Conversely, the adjusted total equity values are negative throughout the entire period, starting at -3,114 million US dollars in 2019 and improving slightly to -1,745 million US dollars in 2022 before deteriorating again to -1,985 million US dollars in 2023. The persistent negative adjusted equity highlights significant asset write-downs or valuation adjustments that erode shareholder value under the adjustment methodology.

Financial Leverage

The reported financial leverage ratio declined steadily from 6.39 in 2019 to 4.69 in 2022, indicating reduced reliance on debt relative to equity. However, there was an uptick to 4.92 in 2023. Adjusted financial leverage ratios were not provided, limiting analysis of leverage on an adjusted basis.

Overall, the data reflects an initial phase of asset and equity growth between 2019 and 2022, followed by declines in both reported and adjusted figures in 2023. The persistent negative adjusted equity suggests the impact of significant intangible asset adjustments. The decrease in financial leverage over time up to 2022 denotes deleveraging efforts, though the slight reversal in 2023 may warrant monitoring. The decline in assets and equity in 2023 could signal operational challenges or strategic shifts affecting the company’s financial position.

The financial data presents an overview of the reported and goodwill-adjusted equity values along with the reported return on equity (ROE) percentages over a five-year period. Various trends and changes in the financial position and performance can be observed.

Reported Total Equity

This value shows a consistent upward trend from 2019 to 2022, increasing from US$2,747 million to US$3,941 million. However, in 2023, there is a notable decline to US$3,175 million, suggesting a reversal of the previous growth trend.

Adjusted Total Equity

The adjusted equity values, which presumably account for goodwill impairment or other adjustments, reveal a negative balance throughout the entire period. The magnitude of the negative adjusted equity decreases from -US$3,114 million in 2019 to -US$1,745 million in 2022, indicating an improving underlying equity position. Nonetheless, in 2023, the adjusted equity deteriorates again to -US$1,985 million, indicating some setback in the adjustments or asset valuation.

Reported Return on Equity (ROE)

The reported ROE percentages demonstrate strong profitability levels in the earlier years, with values exceeding 34% in 2019 and reaching a peak of 40.2% in 2020. These high ROE values remain relatively stable through 2021. In 2022, there is a significant decrease to 24.36%, reflecting a reduction in net income relative to equity. The following year, 2023, shows a partial recovery to 29.95%, though it remains below the initial peak levels observed in 2020 and 2021.

Adjusted ROE

There are no available data for adjusted ROE in the provided periods, which limits the ability to assess shareholder returns when factoring in goodwill or other intangible asset adjustments.

Overall, the company experienced growth in reported equity and robust ROE values early in the period, followed by a decline in both equity and ROE in 2023. The adjusted equity values show improvement until 2022 but deteriorate thereafter, suggesting potential challenges related to goodwill or asset valuation adjustments. The absence of adjusted ROE data represents a gap in fully understanding profitability trends on a goodwill-adjusted basis.

The financial data presents both reported and goodwill-adjusted measures over a five-year period, highlighting trends in total assets and return on assets (ROA).

Total Assets

The reported total assets show a generally stable pattern from 2019 to 2022, increasing slightly from 17,564 million USD in 2019 to 18,496 million USD in 2022. However, in 2023, there is a notable decline to 15,621 million USD, which marks a significant reduction compared to prior years.

The goodwill-adjusted total assets follow a similar trend, increasing moderately from 11,703 million USD in 2019 to 12,810 million USD in 2022, then decreasing to 10,461 million USD in 2023. The adjusted values are consistently lower than reported assets, reflecting the exclusion of goodwill from the asset base.

Return on Assets (ROA)

Reported ROA shows an upward trend from 2019, rising from 5.47% in 2019 to a peak of 8.19% in 2021, indicating improving efficiency in asset utilization over these years. This is followed by a decline to 5.19% in 2022, before a moderate recovery to 6.09% in 2023.

Adjusted ROA, which excludes goodwill effects, consistently remains higher than reported ROA, starting at 8.2% in 2019 and increasing to a peak of 11.99% in 2021. Similar to reported ROA, it declines sharply in 2022 to 7.49%, then recovers to 9.09% in 2023. This pattern suggests operational performance fluctuations were more pronounced when goodwill is adjusted for.

Overall, the data indicates a phase of growth and improving profitability up to 2021, followed by a deterioration in asset base and profitability in 2022, with partial restoration in 2023. The goodwill adjustment consistently impacts asset base and ROA values, providing a different perspective on underlying operational performance. The decline in both asset measures and ROA in 2022 warrants further investigation to understand the causal factors.