Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Sherwin-Williams Co., balance sheet: goodwill and intangible assets

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Goodwill	7,626,000)	7,583,200)	7,134,600)	7,049,100)	7,004,800)
Software	158,200)	180,200)	166,000)	166,800)	166,400)
Customer relationships	3,263,400)	3,121,200)	3,005,700)	3,181,600)	3,062,800)
Intellectual property	1,968,500)	1,732,500)	1,730,300)	1,730,300)	1,730,300)
All other	232,600)	427,500)	303,500)	306,800)	312,900)
Finite-lived intangible assets, gross	5,622,700)	5,461,400)	5,205,500)	5,385,500)	5,272,400)
Accumulated amortization	(2,260,700)	(2,015,600)	(1,787,100)	(1,530,900)	(1,146,300)
Finite-lived intangible assets, net value	3,362,000)	3,445,800)	3,418,400)	3,854,600)	4,126,100)
Trademarks with indefinite lives	518,500)	556,200)	583,100)	616,600)	608,400)
Intangible assets	3,880,500)	4,002,000)	4,001,500)	4,471,200)	4,734,500)
Goodwill and intangible assets	11,506,500)	11,585,200)	11,136,100)	11,520,300)	11,739,300)

Based on: 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), 10-K (reporting date: 2019-12-31).

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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.	Sherwin-Williams Co. goodwill increased from 2021 to 2022 and from 2022 to 2023.
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.	Sherwin-Williams Co. intangible assets increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Goodwill and 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.	Sherwin-Williams Co. goodwill and intangible assets increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Sherwin-Williams Co., adjustments to financial statements

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported)	22,954,400)	22,594,000)	20,666,700)	20,401,600)	20,496,200)
Less: Goodwill	7,626,000)	7,583,200)	7,134,600)	7,049,100)	7,004,800)
Total assets (adjusted)	15,328,400)	15,010,800)	13,532,100)	13,352,500)	13,491,400)
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported)	3,715,800)	3,102,100)	2,437,200)	3,610,800)	4,123,300)
Less: Goodwill	7,626,000)	7,583,200)	7,134,600)	7,049,100)	7,004,800)
Shareholders’ equity (adjusted)	(3,910,200)	(4,481,100)	(4,697,400)	(3,438,300)	(2,881,500)

Based on: 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), 10-K (reporting date: 2019-12-31).

Sherwin-Williams Co., Financial Data: Reported vs. Adjusted

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Sherwin-Williams Co., adjusted financial ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total Asset Turnover
Reported total asset turnover	1.00	0.98	0.97	0.90	0.87
Adjusted total asset turnover	1.50	1.48	1.47	1.38	1.33
Financial Leverage
Reported financial leverage	6.18	7.28	8.48	5.65	4.97
Adjusted financial leverage	—	—	—	—	—
Return on Equity (ROE)
Reported ROE	64.29%	65.12%	76.50%	56.23%	37.38%
Adjusted ROE	—	—	—	—	—
Return on Assets (ROA)
Reported ROA	10.41%	8.94%	9.02%	9.95%	7.52%
Adjusted ROA	15.58%	13.46%	13.78%	15.21%	11.42%

Based on: 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), 10-K (reporting date: 2019-12-31).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Sherwin-Williams Co. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Sherwin-Williams Co. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Sherwin-Williams Co., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net sales	23,051,900)	22,148,900)	19,944,600)	18,361,700)	17,900,800)
Total assets	22,954,400)	22,594,000)	20,666,700)	20,401,600)	20,496,200)
Activity Ratio
Total asset turnover¹	1.00	0.98	0.97	0.90	0.87
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net sales	23,051,900)	22,148,900)	19,944,600)	18,361,700)	17,900,800)
Adjusted total assets	15,328,400)	15,010,800)	13,532,100)	13,352,500)	13,491,400)
Activity Ratio
Adjusted total asset turnover²	1.50	1.48	1.47	1.38	1.33

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 23,051,900 ÷ 22,954,400 = 1.00

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 23,051,900 ÷ 15,328,400 = 1.50

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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.	Sherwin-Williams Co. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Total assets	22,954,400)	22,594,000)	20,666,700)	20,401,600)	20,496,200)
Shareholders’ equity	3,715,800)	3,102,100)	2,437,200)	3,610,800)	4,123,300)
Solvency Ratio
Financial leverage¹	6.18	7.28	8.48	5.65	4.97
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets	15,328,400)	15,010,800)	13,532,100)	13,352,500)	13,491,400)
Adjusted shareholders’ equity	(3,910,200)	(4,481,100)	(4,697,400)	(3,438,300)	(2,881,500)
Solvency Ratio
Adjusted financial leverage²	—	—	—	—	—

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Financial leverage = Total assets ÷ Shareholders’ equity
= 22,954,400 ÷ 3,715,800 = 6.18

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 15,328,400 ÷ -3,910,200 = —

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	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income	2,388,800)	2,020,100)	1,864,400)	2,030,400)	1,541,300)
Shareholders’ equity	3,715,800)	3,102,100)	2,437,200)	3,610,800)	4,123,300)
Profitability Ratio
ROE¹	64.29%	65.12%	76.50%	56.23%	37.38%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income	2,388,800)	2,020,100)	1,864,400)	2,030,400)	1,541,300)
Adjusted shareholders’ equity	(3,910,200)	(4,481,100)	(4,697,400)	(3,438,300)	(2,881,500)
Profitability Ratio
Adjusted ROE²	—	—	—	—	—

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × 2,388,800 ÷ 3,715,800 = 64.29%

² Adjusted ROE = 100 × Net income ÷ Adjusted shareholders’ equity
= 100 × 2,388,800 ÷ -3,910,200 = —

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	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income	2,388,800)	2,020,100)	1,864,400)	2,030,400)	1,541,300)
Total assets	22,954,400)	22,594,000)	20,666,700)	20,401,600)	20,496,200)
Profitability Ratio
ROA¹	10.41%	8.94%	9.02%	9.95%	7.52%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income	2,388,800)	2,020,100)	1,864,400)	2,030,400)	1,541,300)
Adjusted total assets	15,328,400)	15,010,800)	13,532,100)	13,352,500)	13,491,400)
Profitability Ratio
Adjusted ROA²	15.58%	13.46%	13.78%	15.21%	11.42%

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 2,388,800 ÷ 22,954,400 = 10.41%

² Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 2,388,800 ÷ 15,328,400 = 15.58%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Sherwin-Williams Co. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Sherwin-Williams Co. (NYSE:SHW)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Sherwin-Williams Co., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Sherwin-Williams Co., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)