Stock Analysis on Net
Stock Analysis on Net

McKesson Corp. (NYSE:MCK)

This company has been moved to the archive! The financial data has not been updated since October 27, 2016.

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

McKesson Corp., balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
Customer lists 2,652 2,683 3,384 1,761 1,081 1,057
Service agreements 959 957 995 1,018 1,022 723
Pharmacy licenses 857 874 1,219 — — —
Trademarks and trade names 314 315 371 208 192 76
Technology 195 213 219 271 244 204
Other 163 162 165 89 76 76
Intangible assets, gross carrying amount 5,140 5,204 6,353 3,347 2,615 2,136
Accumulated amortization (2,119) (1,763) (1,331) (1,077) (865) (680)
Intangible assets, net carrying amount 3,021 3,441 5,022 2,270 1,750 1,456
Goodwill 9,786 9,817 9,927 6,405 5,032 4,364
Goodwill and intangible assets, net 12,807 13,258 14,949 8,675 6,782 5,820

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

Item Description The company
Intangible assets, net carrying amount Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. McKesson Corp. intangible assets, net carrying amount decreased from 2014 to 2015 and from 2015 to 2016.
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. McKesson Corp. goodwill decreased from 2014 to 2015 and from 2015 to 2016.
Goodwill and intangible assets, net Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. McKesson Corp. goodwill and intangible assets, net decreased from 2014 to 2015 and from 2015 to 2016.

Adjustments to Financial Statements: Removal of Goodwill

McKesson Corp., adjustments to financial statements

US$ in millions

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
Adjustment to Total Assets
Total assets (as reported) 56,563 53,870 51,759 34,786 33,093 30,886
Less: Goodwill 9,786 9,817 9,927 6,405 5,032 4,364
Total assets (adjusted) 46,777 44,053 41,832 28,381 28,061 26,522
Adjustment to Total McKesson Corporation Stockholders’ Equity
Total McKesson Corporation stockholders’ equity (as reported) 8,924 8,001 8,522 7,070 6,831 7,220
Less: Goodwill 9,786 9,817 9,927 6,405 5,032 4,364
Total McKesson Corporation stockholders’ equity (adjusted) (862) (1,816) (1,405) 665 1,799 2,856
Adjustment to Net Income Attributable To McKesson Corporation
Net income attributable to McKesson Corporation (as reported) 2,258 1,476 1,263 1,338 1,403 1,202
Add: Goodwill impairment losses — — — 36 — —
Net income attributable to McKesson Corporation (adjusted) 2,258 1,476 1,263 1,374 1,403 1,202

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

McKesson Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

McKesson Corp., adjusted financial ratios

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
Net Profit Margin
Reported net profit margin 1.18% 0.82% 0.92% 1.09% 1.14% 1.07%
Adjusted net profit margin 1.18% 0.82% 0.92% 1.12% 1.14% 1.07%
Total Asset Turnover
Reported total asset turnover 3.37 3.32 2.66 3.52 3.71 3.63
Adjusted total asset turnover 4.08 4.06 3.29 4.31 4.37 4.23
Financial Leverage
Reported financial leverage 6.34 6.73 6.07 4.92 4.84 4.28
Adjusted financial leverage — — — 42.68 15.60 9.29
Return on Equity (ROE)
Reported ROE 25.30% 18.45% 14.82% 18.93% 20.54% 16.65%
Adjusted ROE — — — 206.62% 77.99% 42.09%
Return on Assets (ROA)
Reported ROA 3.99% 2.74% 2.44% 3.85% 4.24% 3.89%
Adjusted ROA 4.83% 3.35% 3.02% 4.84% 5.00% 4.53%

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. McKesson Corp. adjusted net profit margin ratio deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. McKesson Corp. adjusted total asset turnover ratio improved from 2014 to 2015 and from 2015 to 2016.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. McKesson Corp. adjusted ROA improved from 2014 to 2015 and from 2015 to 2016.

McKesson Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to McKesson Corporation 2,258 1,476 1,263 1,338 1,403 1,202
Revenues 190,884 179,045 137,609 122,455 122,734 112,084
Profitability Ratio
Net profit margin1 1.18% 0.82% 0.92% 1.09% 1.14% 1.07%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income attributable to McKesson Corporation 2,258 1,476 1,263 1,374 1,403 1,202
Revenues 190,884 179,045 137,609 122,455 122,734 112,084
Profitability Ratio
Adjusted net profit margin2 1.18% 0.82% 0.92% 1.12% 1.14% 1.07%

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

2016 Calculations

1 Net profit margin = 100 × Net income attributable to McKesson Corporation ÷ Revenues
= 100 × 2,258 ÷ 190,884 = 1.18%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to McKesson Corporation ÷ Revenues
= 100 × 2,258 ÷ 190,884 = 1.18%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. McKesson Corp. adjusted net profit margin ratio deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level.

Adjusted Total Asset Turnover

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Revenues 190,884 179,045 137,609 122,455 122,734 112,084
Total assets 56,563 53,870 51,759 34,786 33,093 30,886
Activity Ratio
Total asset turnover1 3.37 3.32 2.66 3.52 3.71 3.63
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenues 190,884 179,045 137,609 122,455 122,734 112,084
Adjusted total assets 46,777 44,053 41,832 28,381 28,061 26,522
Activity Ratio
Adjusted total asset turnover2 4.08 4.06 3.29 4.31 4.37 4.23

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

2016 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 190,884 ÷ 56,563 = 3.37

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 190,884 ÷ 46,777 = 4.08

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. McKesson Corp. adjusted total asset turnover ratio improved from 2014 to 2015 and from 2015 to 2016.

Adjusted Financial Leverage

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Total assets 56,563 53,870 51,759 34,786 33,093 30,886
Total McKesson Corporation stockholders’ equity 8,924 8,001 8,522 7,070 6,831 7,220
Solvency Ratio
Financial leverage1 6.34 6.73 6.07 4.92 4.84 4.28
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 46,777 44,053 41,832 28,381 28,061 26,522
Adjusted total McKesson Corporation stockholders’ equity (862) (1,816) (1,405) 665 1,799 2,856
Solvency Ratio
Adjusted financial leverage2 — — — 42.68 15.60 9.29

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

2016 Calculations

1 Financial leverage = Total assets ÷ Total McKesson Corporation stockholders’ equity
= 56,563 ÷ 8,924 = 6.34

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total McKesson Corporation stockholders’ equity
= 46,777 ÷ -862 = —

Adjusted Return on Equity (ROE)

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to McKesson Corporation 2,258 1,476 1,263 1,338 1,403 1,202
Total McKesson Corporation stockholders’ equity 8,924 8,001 8,522 7,070 6,831 7,220
Profitability Ratio
ROE1 25.30% 18.45% 14.82% 18.93% 20.54% 16.65%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income attributable to McKesson Corporation 2,258 1,476 1,263 1,374 1,403 1,202
Adjusted total McKesson Corporation stockholders’ equity (862) (1,816) (1,405) 665 1,799 2,856
Profitability Ratio
Adjusted ROE2 — — — 206.62% 77.99% 42.09%

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

2016 Calculations

1 ROE = 100 × Net income attributable to McKesson Corporation ÷ Total McKesson Corporation stockholders’ equity
= 100 × 2,258 ÷ 8,924 = 25.30%

2 Adjusted ROE = 100 × Adjusted net income attributable to McKesson Corporation ÷ Adjusted total McKesson Corporation stockholders’ equity
= 100 × 2,258 ÷ -862 = —

Adjusted Return on Assets (ROA)

Microsoft Excel
Mar 31, 2016 Mar 31, 2015 Mar 31, 2014 Mar 31, 2013 Mar 31, 2012 Mar 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to McKesson Corporation 2,258 1,476 1,263 1,338 1,403 1,202
Total assets 56,563 53,870 51,759 34,786 33,093 30,886
Profitability Ratio
ROA1 3.99% 2.74% 2.44% 3.85% 4.24% 3.89%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income attributable to McKesson Corporation 2,258 1,476 1,263 1,374 1,403 1,202
Adjusted total assets 46,777 44,053 41,832 28,381 28,061 26,522
Profitability Ratio
Adjusted ROA2 4.83% 3.35% 3.02% 4.84% 5.00% 4.53%

Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).

2016 Calculations

1 ROA = 100 × Net income attributable to McKesson Corporation ÷ Total assets
= 100 × 2,258 ÷ 56,563 = 3.99%

2 Adjusted ROA = 100 × Adjusted net income attributable to McKesson Corporation ÷ Adjusted total assets
= 100 × 2,258 ÷ 46,777 = 4.83%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. McKesson Corp. adjusted ROA improved from 2014 to 2015 and from 2015 to 2016.