Motorola Solutions Inc. (NYSE:MSI)

The analysis of the financial data reveals several notable trends regarding intangible assets and goodwill over the five-year period ending December 31, 2023.

Developed Technology

There has been a consistent increase in the value of developed technology, rising from $738 million in 2019 to $1,156 million in 2023. The largest year-over-year growth occurred between 2021 and 2022, with a substantial increase of $255 million, indicating increased investment or valuation in this intangible asset.

Patents

The value of patents remained stable at $2 million annually throughout the period, showing no change or revaluation during these years.

Customer-Related Intangibles

The customer-related intangible assets also showed a steady upward trend, increasing from $1,222 million in 2019 to $1,566 million in 2023. Growth was consistent each year, reflecting a strengthening or expansion of customer-related assets.

Other Intangibles

Other intangible assets rose gradually from $75 million to $105 million, indicating a modest increase, which may relate to smaller scale intangibles or newly recognized assets.

Intangible Assets, Gross

The aggregate gross intangible assets increased steadily from $2,037 million to $2,829 million, primarily driven by the increases in developed technology, customer-related assets, and other intangibles. The increase was most pronounced between 2021 and 2022, consistent with the strong growth in developed technology.

Accumulated Amortization

Accumulated amortization showed a continuous increase in absolute value (noting that it is recorded as a negative), moving from -$710 million in 2019 to -$1,574 million in 2023. This trend reflects ongoing amortization expense over time, which reduces the net carrying amount of intangible assets.

Intangible Assets, Net

The net intangible assets (gross less accumulated amortization) presented a fluctuating trend. After decreasing from $1,327 million in 2019 to $1,105 million in 2021, it increased in 2022 to $1,342 million before declining again to $1,255 million in 2023. This fluctuation suggests that while new intangible assets have been recognized, amortization and possibly impairments or disposals have impacted the net value unevenly.

Goodwill

Goodwill exhibited pronounced growth from $2,067 million in 2019 to $3,401 million in 2023, with the most significant increases occurring in 2021 and 2022. This sizable rise could be indicative of acquisitions or business combinations enhancing the company's goodwill balance.

Intangible Assets and Goodwill Combined

The combined total of intangible assets and goodwill rose from $3,394 million to $4,656 million over the period, with the sharpest increase between 2021 and 2022. This overall upward trend highlights growing investment or recognition of intangible value and goodwill on the balance sheet, driven primarily by goodwill growth and increases in developed technology and customer-related assets.

The financial data reveals distinct trends in both reported and goodwill-adjusted figures over the five-year period.

Total Assets

The reported total assets exhibit a steady increase year over year, rising from 10,642 million US dollars in 2019 to 13,336 million US dollars in 2023, reflecting an overall growth trend in the company's asset base. The adjusted total assets, which exclude goodwill, follow a similar upward path, increasing from 8,575 million to 9,935 million US dollars over the same period, although there is a slight dip observed in 2022 when adjusted assets fell from 9,624 million to 9,502 million US dollars before recovering in 2023. This decline could indicate an impairment or revaluation adjustment affecting non-goodwill assets in that year.

Stockholders’ Equity (Deficit)

The reported stockholders’ equity position shows a marked improvement, transitioning from a deficit of 700 million US dollars in 2019 to a positive equity surplus of 724 million US dollars by 2023. This progression suggests enhanced net asset value attributable to shareholders and potentially improved profitability or capital restructuring measures. Conversely, the goodwill-adjusted equity maintains a substantial negative balance throughout the period, starting at -2,767 million US dollars in 2019 and slightly improving to -2,677 million US dollars by 2023. The negative adjusted equity balance suggests that when excluding goodwill, liabilities exceed tangible assets, which may raise concerns about the net tangible asset base and financial stability from a conservative standpoint.

Overall, the reported figures indicate asset growth and strengthening equity, whereas the adjusted data highlight persistent challenges related to intangible asset valuation and underlying net asset value. The conflicting trends between reported and adjusted equity require careful interpretation, particularly for assessing underlying financial health excluding goodwill effects.

Total Asset Turnover

The reported total asset turnover ratio shows a slight decline from 0.74 in 2019 to 0.67 in 2021, followed by a gradual recovery, reaching 0.75 in 2023. This indicates a temporary decrease in asset utilization efficiency, which improved in the later periods. The adjusted total asset turnover, which likely excludes goodwill, follows a similar trend but remains consistently higher than the reported figures, starting at 0.92 in 2019 and increasing to 1.00 in 2023. This suggests that the underlying asset base, excluding goodwill, has become increasingly efficient in generating sales over time.

Financial Leverage

Reported financial leverage data is only available for the years 2022 and 2023, showing a significant decrease from an unusually high ratio of 110.47 in 2022 to 18.42 in 2023. This sharp decline may indicate a major retrenchment in the use of debt or financial obligations relative to equity. No adjusted financial leverage data is provided.

Return on Equity (ROE)

Reported ROE figures are available only for the years 2022 and 2023, showing very high values of 1175% and 236.05% respectively. These exceptionally high percentages suggest either extraordinary profit levels in relation to equity or unusual accounting events affecting equity during these periods. The large drop from 2022 to 2023 indicates a normalization or significant change in profitability or equity base. No adjusted ROE data is available for comparison.

Return on Assets (ROA)

Reported ROA displays a positive trend, increasing steadily from 8.16% in 2019 to 12.81% in 2023. This improvement suggests enhanced profitability relative to total assets. The adjusted ROA, which may exclude goodwill or other adjustments, is consistently higher than the reported ROA and shows an even stronger upward trend, rising from 10.12% in 2019 to 17.20% in 2023. This points to an improving operational efficiency and asset profitability when excluding intangible asset effects.

Reported Total Assets

The reported total assets showed a consistent upward trend over the five-year period, increasing from 10,642 million US dollars in 2019 to 13,336 million US dollars in 2023. This reflects steady growth in the asset base, with an overall increase of approximately 25% by the end of 2023.

Adjusted Total Assets

Adjusted total assets, which exclude goodwill, also increased but at a slower pace compared to reported total assets. Starting at 8,575 million US dollars in 2019, they rose to 9,935 million US dollars by 2023. Notably, there was a slight decline observed in 2022 from 9,624 million to 9,502 million before rising again in 2023. This suggests some volatility in the tangible asset base but overall growth nearing 16% over the period.

Reported Total Asset Turnover

Reported total asset turnover ratios showed some fluctuation. Beginning at 0.74 in 2019, it declined to 0.67 in 2021, indicating a decrease in efficiency in generating revenue relative to reported assets. However, a recovery occurred from 2022 onwards, rising to 0.75 in 2023, slightly surpassing the initial 2019 level. This improvement suggests a positive trend in utilizing the asset base more effectively in recent years.

Adjusted Total Asset Turnover

The adjusted total asset turnover, which focuses on assets excluding goodwill, consistently demonstrated higher values than the reported measures, indicating greater efficiency in revenue generation relative to tangible assets. Starting at 0.92 in 2019, it decreased to 0.85 by 2021 but then exhibited a marked improvement to 1.0 in 2023. This upward trend reflects improved asset utilization efficiency, particularly when excluding intangible assets, and implies better operational performance or asset management in recent periods.

The financial data reveals distinct trends in both reported and goodwill-adjusted figures over the five-year period from 2019 to 2023.

Total Assets

The reported total assets have shown a steady increase year-over-year, rising from 10,642 million US dollars in 2019 to 13,336 million US dollars in 2023. This represents consistent asset growth, indicative of expansion or increased investment in asset holdings.

Adjusted total assets, which exclude goodwill and possibly other intangible assets, also increased, but at a more moderate pace. The value rose from 8,575 million US dollars in 2019 to 9,935 million US dollars in 2023, showing some fluctuations with a slight decline in 2022 before rising again in 2023. The adjusted asset base remains significantly lower than the reported asset base, highlighting the impact of goodwill and other adjustments on total asset valuation.

Stockholders’ Equity

The reported stockholders’ equity, starting from a negative 700 million US dollars in 2019, improved substantially over the period to reach a positive 724 million US dollars by 2023. The transition from deficit to positive equity indicates a strengthening capital structure and improved net asset value attributable to shareholders.

Conversely, the adjusted stockholders’ equity remains negative throughout the entire period, fluctuating from a deficit of 2,767 million US dollars in 2019 to 2,677 million US dollars in 2023. The adjusted figures suggest persistent underlying equity challenges when goodwill and similar items are excluded, indicating reliance on intangible assets for the positive equity reported.

Financial Leverage

Reported financial leverage ratios are only available for 2022 and 2023 and show a dramatic decrease from an extremely high ratio of 110.47 in 2022 to a much lower ratio of 18.42 in 2023. This large change implies a significant reduction in leverage, pointing to lower reliance on debt or increased equity base in 2023 compared to 2022.

Adjusted financial leverage data is missing, preventing a direct analysis of leverage trends without the effect of goodwill and other adjustments.

Overall, the reported data exhibits a positive trajectory of asset growth, equity recovery, and leverage reduction in recent years. The adjusted metrics, however, reveal that intrinsic equity remains negative and adjusted asset growth more subdued, emphasizing the importance of goodwill in the reported financial position. The sharp improvement in reported equity and leverage may require further qualitative analysis to understand the underlying changes such as asset revaluations, goodwill impairments, or capital restructuring events affecting these figures.

Stockholders’ Equity (Reported)

The reported stockholders’ equity of the company exhibited a consistent upward trend from a deficit of -700 million US dollars in 2019 to a positive 724 million US dollars in 2023. This transition from negative to positive equity suggests improvement in the company’s net asset position over the five-year period, moving from a balance sheet weakness to a surplus by the end of 2023.

Stockholders’ Equity (Adjusted)

The adjusted total stockholders’ equity, which likely accounts for goodwill adjustments, showed a persistent negative position throughout the period. Beginning at -2,767 million US dollars in 2019, the deficit slightly fluctuated but remained substantial, ending at -2,677 million US dollars in 2023. This indicates that goodwill adjustments continue to significantly affect the company’s equity base, resulting in a sustained recognized deficit when these adjustments are considered.

Return on Equity (Reported)

Reported ROE was not available for the years 2019 through 2021. However, for 2022 and 2023, reported ROE values were extraordinarily high at 1,175% and 236.05% respectively. These unusually elevated ROE figures may reflect the transition from negative to positive equity, which typically inflates ROE calculations, or they may indicate one-time events or extraordinary earnings impacting those years. The sharp decrease from 1,175% in 2022 to 236.05% in 2023, while still high, points to some normalization.

Return on Equity (Adjusted)

No data was provided for adjusted ROE for all periods, preventing any analysis of profitability measures when accounting for goodwill adjustments.

The analysis of the financial data reveals several notable trends and patterns over the reported periods from 2019 to 2023.

Total Assets

The reported total assets have shown a consistent upward trend, increasing from US$10,642 million in 2019 to US$13,336 million in 2023. This represents a gradual growth in total assets over the five-year span, indicating potential expansion or acquisition activities.

The adjusted total assets, which exclude goodwill or other intangible components, also demonstrate growth but at a relatively lower scale. Starting at US$8,575 million in 2019, they increased to US$9,935 million by 2023. Notably, there was a slight dip in 2022 compared to 2021, where adjusted total assets declined from US$9,624 million to US$9,502 million, before recovering in 2023.

Return on Assets (ROA)

The reported ROA exhibited a positive trajectory, rising from 8.16% in 2019 to 12.81% in 2023. This trend suggests an improving efficiency in generating earnings from the company's asset base over the years.

The adjusted ROA, which factors in the exclusion of goodwill, consistently exceeded the reported ROA each year. It increased notably from 10.12% in 2019 to 17.20% in 2023. This widening margin between adjusted and reported ROA highlights that the operational performance, excluding goodwill amortization or impairment effects, improved more significantly.

Comparative Insights

The gap between reported and adjusted total assets suggests that goodwill and intangible assets constitute a substantial portion of total assets. While both asset measures and ROAs improved annually, the adjusted figures provide a clearer view of core operational performance by excluding intangible asset effects.

The temporary decline in adjusted total assets in 2022 may reflect asset revaluation or impairment adjustments, but the subsequent recovery and continuous growth in ROA indicate resilient operational profitability.

Overall, the company demonstrated steady growth in asset base and enhanced profitability across the observed period, with adjusted metrics reinforcing the underlying improvement in asset utilization and earnings generation.