Inventory Disclosure
Adjustment to Inventory: Conversion from LIFO to FIFO
Adjusted Financial Ratios: LIFO vs. FIFO (Summary)
Adjusted Current Ratio
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Parker-Hannifin Corp., balance sheet: inventory

US$ in thousands

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
Finished products	811,702)	733,744)	694,577)	663,068)	673,323)	642,788)
Work in process	1,128,501)	1,089,976)	881,104)	850,778)	765,835)	723,133)
Raw materials	274,350)	266,922)	238,950)	164,286)	182,146)	183,573)
Inventories	2,214,553)	2,090,642)	1,814,631)	1,678,132)	1,621,304)	1,549,494)

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

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Item	Description	The company
Inventories	Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer.	Parker-Hannifin Corp. inventories increased from 2020 to 2021 and from 2021 to 2022.

Adjusting LIFO Inventory to FIFO (Current) Cost

US$ in thousands

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
Adjustment to Inventories
Inventories at LIFO (as reported)	2,214,553)	2,090,642)	1,814,631)	1,678,132)	1,621,304)	1,549,494)
Add: Inventory LIFO reserve	—)	—)	219,854)	222,715)	203,192)	193,933)
Inventories at FIFO (adjusted)	2,214,553)	2,090,642)	2,034,485)	1,900,847)	1,824,496)	1,743,427)
Adjustment to Current Assets
Current assets (as reported)	12,046,644)	5,616,750)	4,885,204)	7,673,086)	5,085,238)	4,779,718)
Add: Inventory LIFO reserve	—)	—)	219,854)	222,715)	203,192)	193,933)
Current assets (adjusted)	12,046,644)	5,616,750)	5,105,058)	7,895,801)	5,288,430)	4,973,651)
Adjustment to Total Assets
Total assets (as reported)	25,943,943)	20,341,200)	19,738,189)	17,576,690)	15,320,087)	15,489,904)
Add: Inventory LIFO reserve	—)	—)	219,854)	222,715)	203,192)	193,933)
Total assets (adjusted)	25,943,943)	20,341,200)	19,958,043)	17,799,405)	15,523,279)	15,683,837)
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported)	8,848,011)	8,398,307)	6,113,983)	5,961,969)	5,859,866)	5,261,649)
Add: Inventory LIFO reserve	—)	—)	219,854)	222,715)	203,192)	193,933)
Shareholders’ equity (adjusted)	8,848,011)	8,398,307)	6,333,837)	6,184,684)	6,063,058)	5,455,582)
Adjustment to Net Income Attributable To Common Shareholders
Net income attributable to common shareholders (as reported)	1,315,605)	1,746,100)	1,206,341)	1,512,364)	1,060,801)	983,412)
Add: Increase (decrease) in inventory LIFO reserve	—)	—)	(2,861)	19,523)	9,259)	(6,314)
Net income attributable to common shareholders (adjusted)	1,315,605)	1,746,100)	1,203,480)	1,531,887)	1,070,060)	977,098)

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

Parker-Hannifin Corp. inventory value on Jun 30, 2022 would be $2,214,553) (in thousands) if the FIFO inventory method was used instead of LIFO. Parker-Hannifin Corp. inventories, valued on a LIFO basis, on Jun 30, 2022 were $2,214,553). Parker-Hannifin Corp. inventories would have been $—) higher than reported on Jun 30, 2022 if the FIFO method had been used instead.

Parker-Hannifin Corp., Financial Data: Reported vs. Adjusted

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Parker-Hannifin Corp., adjusted financial ratios

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
Current Ratio
Reported current ratio (LIFO)	2.06	1.81	1.55	2.43	1.59	1.41
Adjusted current ratio (FIFO)	2.06	1.81	1.62	2.51	1.65	1.46
Net Profit Margin
Reported net profit margin (LIFO)	8.29%	12.17%	8.81%	10.56%	7.42%	8.18%
Adjusted net profit margin (FIFO)	8.29%	12.17%	8.79%	10.70%	7.48%	8.12%
Total Asset Turnover
Reported total asset turnover (LIFO)	0.61	0.71	0.69	0.81	0.93	0.78
Adjusted total asset turnover (FIFO)	0.61	0.71	0.69	0.80	0.92	0.77
Financial Leverage
Reported financial leverage (LIFO)	2.93	2.42	3.23	2.95	2.61	2.94
Adjusted financial leverage (FIFO)	2.93	2.42	3.15	2.88	2.56	2.87
Return on Equity (ROE)
Reported ROE (LIFO)	14.87%	20.79%	19.73%	25.37%	18.10%	18.69%
Adjusted ROE (FIFO)	14.87%	20.79%	19.00%	24.77%	17.65%	17.91%
Return on Assets (ROA)
Reported ROA (LIFO)	5.07%	8.58%	6.11%	8.60%	6.92%	6.35%
Adjusted ROA (FIFO)	5.07%	8.58%	6.03%	8.61%	6.89%	6.23%

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

Financial ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by current liabilities.	Parker-Hannifin Corp. adjusted current ratio improved from 2020 to 2021 and from 2021 to 2022.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Parker-Hannifin Corp. adjusted net profit margin ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Parker-Hannifin Corp. adjusted total asset turnover ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.
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.	Parker-Hannifin Corp. adjusted financial leverage ratio decreased from 2020 to 2021 but then increased from 2021 to 2022 not reaching 2020 level.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Parker-Hannifin Corp. adjusted ROE improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Parker-Hannifin Corp. adjusted ROA improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.

Parker-Hannifin Corp., Financial Ratios: Reported vs. Adjusted

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	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
As Reported
Selected Financial Data (US$ in thousands)
Current assets	12,046,644)	5,616,750)	4,885,204)	7,673,086)	5,085,238)	4,779,718)
Current liabilities	5,859,318)	3,096,503)	3,148,373)	3,151,773)	3,197,483)	3,395,860)
Liquidity Ratio
Current ratio¹	2.06	1.81	1.55	2.43	1.59	1.41
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Adjusted current assets	12,046,644)	5,616,750)	5,105,058)	7,895,801)	5,288,430)	4,973,651)
Current liabilities	5,859,318)	3,096,503)	3,148,373)	3,151,773)	3,197,483)	3,395,860)
Liquidity Ratio
Adjusted current ratio²	2.06	1.81	1.62	2.51	1.65	1.46

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

2022 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= 12,046,644 ÷ 5,859,318 = 2.06

² Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= 12,046,644 ÷ 5,859,318 = 2.06

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Liquidity ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by current liabilities.	Parker-Hannifin Corp. adjusted current ratio improved from 2020 to 2021 and from 2021 to 2022.

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to common shareholders	1,315,605)	1,746,100)	1,206,341)	1,512,364)	1,060,801)	983,412)
Net sales	15,861,608)	14,347,640)	13,695,520)	14,320,324)	14,302,392)	12,029,312)
Profitability Ratio
Net profit margin¹	8.29%	12.17%	8.81%	10.56%	7.42%	8.18%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to common shareholders	1,315,605)	1,746,100)	1,203,480)	1,531,887)	1,070,060)	977,098)
Net sales	15,861,608)	14,347,640)	13,695,520)	14,320,324)	14,302,392)	12,029,312)
Profitability Ratio
Adjusted net profit margin²	8.29%	12.17%	8.79%	10.70%	7.48%	8.12%

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

2022 Calculations

¹ Net profit margin = 100 × Net income attributable to common shareholders ÷ Net sales
= 100 × 1,315,605 ÷ 15,861,608 = 8.29%

² Adjusted net profit margin = 100 × Adjusted net income attributable to common shareholders ÷ Net sales
= 100 × 1,315,605 ÷ 15,861,608 = 8.29%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Parker-Hannifin Corp. adjusted net profit margin ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net sales	15,861,608)	14,347,640)	13,695,520)	14,320,324)	14,302,392)	12,029,312)
Total assets	25,943,943)	20,341,200)	19,738,189)	17,576,690)	15,320,087)	15,489,904)
Activity Ratio
Total asset turnover¹	0.61	0.71	0.69	0.81	0.93	0.78
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Net sales	15,861,608)	14,347,640)	13,695,520)	14,320,324)	14,302,392)	12,029,312)
Adjusted total assets	25,943,943)	20,341,200)	19,958,043)	17,799,405)	15,523,279)	15,683,837)
Activity Ratio
Adjusted total asset turnover²	0.61	0.71	0.69	0.80	0.92	0.77

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

2022 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 15,861,608 ÷ 25,943,943 = 0.61

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 15,861,608 ÷ 25,943,943 = 0.61

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Parker-Hannifin Corp. adjusted total asset turnover ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
As Reported
Selected Financial Data (US$ in thousands)
Total assets	25,943,943)	20,341,200)	19,738,189)	17,576,690)	15,320,087)	15,489,904)
Shareholders’ equity	8,848,011)	8,398,307)	6,113,983)	5,961,969)	5,859,866)	5,261,649)
Solvency Ratio
Financial leverage¹	2.93	2.42	3.23	2.95	2.61	2.94
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Adjusted total assets	25,943,943)	20,341,200)	19,958,043)	17,799,405)	15,523,279)	15,683,837)
Adjusted shareholders’ equity	8,848,011)	8,398,307)	6,333,837)	6,184,684)	6,063,058)	5,455,582)
Solvency Ratio
Adjusted financial leverage²	2.93	2.42	3.15	2.88	2.56	2.87

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

2022 Calculations

¹ Financial leverage = Total assets ÷ Shareholders’ equity
= 25,943,943 ÷ 8,848,011 = 2.93

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 25,943,943 ÷ 8,848,011 = 2.93

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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.	Parker-Hannifin Corp. adjusted financial leverage ratio decreased from 2020 to 2021 but then increased from 2021 to 2022 not reaching 2020 level.

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to common shareholders	1,315,605)	1,746,100)	1,206,341)	1,512,364)	1,060,801)	983,412)
Shareholders’ equity	8,848,011)	8,398,307)	6,113,983)	5,961,969)	5,859,866)	5,261,649)
Profitability Ratio
ROE¹	14.87%	20.79%	19.73%	25.37%	18.10%	18.69%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to common shareholders	1,315,605)	1,746,100)	1,203,480)	1,531,887)	1,070,060)	977,098)
Adjusted shareholders’ equity	8,848,011)	8,398,307)	6,333,837)	6,184,684)	6,063,058)	5,455,582)
Profitability Ratio
Adjusted ROE²	14.87%	20.79%	19.00%	24.77%	17.65%	17.91%

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

2022 Calculations

¹ ROE = 100 × Net income attributable to common shareholders ÷ Shareholders’ equity
= 100 × 1,315,605 ÷ 8,848,011 = 14.87%

² Adjusted ROE = 100 × Adjusted net income attributable to common shareholders ÷ Adjusted shareholders’ equity
= 100 × 1,315,605 ÷ 8,848,011 = 14.87%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Parker-Hannifin Corp. adjusted ROE improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to common shareholders	1,315,605)	1,746,100)	1,206,341)	1,512,364)	1,060,801)	983,412)
Total assets	25,943,943)	20,341,200)	19,738,189)	17,576,690)	15,320,087)	15,489,904)
Profitability Ratio
ROA¹	5.07%	8.58%	6.11%	8.60%	6.92%	6.35%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to common shareholders	1,315,605)	1,746,100)	1,203,480)	1,531,887)	1,070,060)	977,098)
Adjusted total assets	25,943,943)	20,341,200)	19,958,043)	17,799,405)	15,523,279)	15,683,837)
Profitability Ratio
Adjusted ROA²	5.07%	8.58%	6.03%	8.61%	6.89%	6.23%

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

2022 Calculations

¹ ROA = 100 × Net income attributable to common shareholders ÷ Total assets
= 100 × 1,315,605 ÷ 25,943,943 = 5.07%

² Adjusted ROA = 100 × Adjusted net income attributable to common shareholders ÷ Adjusted total assets
= 100 × 1,315,605 ÷ 25,943,943 = 5.07%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Parker-Hannifin Corp. adjusted ROA improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.

Parker-Hannifin Corp. (NYSE:PH)

Analysis of Inventory

Inventory Disclosure

Adjustment to Inventory: Conversion from LIFO to FIFO

Parker-Hannifin Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: LIFO vs. FIFO (Summary)

Parker-Hannifin Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)