Stock Analysis on Net
Stock Analysis on Net

Sherwin-Williams Co. (NYSE:SHW)

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Sherwin-Williams Co., income tax expense (benefit), continuing operations

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Federal 558,000 553,400 505,500 331,200 457,700
Foreign 155,100 147,600 90,300 86,500 92,000
State and local 132,200 109,000 102,000 46,800 84,400
Current 845,300 810,000 697,800 464,500 634,100
Federal (54,800) (39,900) (81,700) (36,500) (102,700)
Foreign (15,800) (51,500) (47,300) (40,400) (19,000)
State and local (4,300) 2,500 (15,800) (3,400) (23,600)
Deferred (74,900) (88,900) (144,800) (80,300) (145,300)
Provisions for income taxes 770,400 721,100 553,000 384,200 488,800

Based on: 10-K (reporting date: 2024-12-31), 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).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Sherwin-Williams Co. current increased from 2022 to 2023 and from 2023 to 2024.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Sherwin-Williams Co. deferred increased from 2022 to 2023 and from 2023 to 2024.
Provisions for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Sherwin-Williams Co. provisions for income taxes increased from 2022 to 2023 and from 2023 to 2024.

Effective Income Tax Rate (EITR)

Sherwin-Williams Co., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Statutory federal income tax rate 21.00% 21.00% 21.00% 21.00% 21.00%
State and local income taxes 3.20% 3.00% 2.80% 2.20% 2.50%
Investment vehicles -0.50% -0.50% -0.40% -0.80% -0.80%
Employee share-based payments -2.10% -1.10% -1.40% -4.80% -3.80%
Research and development credits -0.30% -0.40% -0.60% -0.60% -0.50%
Amended returns and refunds -0.20% 0.20% 0.40% 0.20% 0.30%
Taxes on non-U.S. earnings 1.10% 0.80% 0.20% -0.40% 0.00%
Other, net 0.10% 0.20% -0.50% 0.30% 0.70%
Reported effective tax rate 22.30% 23.20% 21.50% 17.10% 19.40%

Based on: 10-K (reporting date: 2024-12-31), 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).

Item Description The company
Reported effective tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Sherwin-Williams Co. reported effective tax rate increased from 2022 to 2023 but then slightly decreased from 2023 to 2024 not reaching 2022 level.

Components of Deferred Tax Assets and Liabilities

Sherwin-Williams Co., components of deferred tax assets and liabilities

US$ in thousands

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Environmental and other similar items 66,800 72,000 66,400 73,200 82,900
Employee related and benefit items 175,200 162,100 157,100 170,300 166,600
Operating lease liabilities 499,600 483,200 478,100 463,100 448,900
Research and development capitalization 103,900 81,500 52,600 — —
Other items 206,500 205,600 204,100 192,000 232,800
Deferred tax assets 1,052,000 1,004,400 958,300 898,600 931,200
Intangible assets and Property, plant, and equipment (948,700) (1,001,100) (973,400) (1,053,700) (1,156,400)
LIFO inventories (120,500) (115,200) (97,300) (68,600) (87,600)
Operating lease right-of-use assets (482,100) (465,600) (460,500) (448,400) (434,000)
Other items (40,700) (28,600) (31,700) (33,300) (31,700)
Deferred tax liabilities (1,592,000) (1,610,500) (1,562,900) (1,604,000) (1,709,700)
Net deferred tax assets (liabilities) (540,000) (606,100) (604,600) (705,400) (778,500)

Based on: 10-K (reporting date: 2024-12-31), 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).

Item Description The company
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Sherwin-Williams Co. deferred tax assets increased from 2022 to 2023 and from 2023 to 2024.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Sherwin-Williams Co. net deferred tax assets (liabilities) decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

Deferred Tax Assets and Liabilities, Classification

Sherwin-Williams Co., deferred tax assets and liabilities, classification

US$ in thousands

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Deferred tax assets 67,500 77,000 77,000 62,800 67,600
Deferred tax liabilities 607,500 683,100 681,600 768,200 846,100

Based on: 10-K (reporting date: 2024-12-31), 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).

Item Description The company
Deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Sherwin-Williams Co. deferred tax liabilities increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.

Adjustments to Financial Statements: Removal of Deferred Taxes

Sherwin-Williams Co., adjustments to financial statements

US$ in thousands

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Adjustment to Total Assets
Total assets (as reported) 23,632,600 22,954,400 22,594,000 20,666,700 20,401,600
Less: Noncurrent deferred tax assets, net 67,500 77,000 77,000 62,800 67,600
Total assets (adjusted) 23,565,100 22,877,400 22,517,000 20,603,900 20,334,000
Adjustment to Total Liabilities
Total liabilities (as reported) 19,581,400 19,238,600 19,491,900 18,229,500 16,790,800
Less: Noncurrent deferred tax liabilities, net 607,500 683,100 681,600 768,200 846,100
Total liabilities (adjusted) 18,973,900 18,555,500 18,810,300 17,461,300 15,944,700
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported) 4,051,200 3,715,800 3,102,100 2,437,200 3,610,800
Less: Net deferred tax assets (liabilities) (540,000) (606,100) (604,600) (705,400) (778,500)
Shareholders’ equity (adjusted) 4,591,200 4,321,900 3,706,700 3,142,600 4,389,300
Adjustment to Net Income
Net income (as reported) 2,681,400 2,388,800 2,020,100 1,864,400 2,030,400
Add: Deferred income tax expense (benefit) (74,900) (88,900) (144,800) (80,300) (145,300)
Net income (adjusted) 2,606,500 2,299,900 1,875,300 1,784,100 1,885,100

Based on: 10-K (reporting date: 2024-12-31), 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).

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

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Sherwin-Williams Co., adjusted financial ratios

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net Profit Margin
Reported net profit margin 11.61% 10.36% 9.12% 9.35% 11.06%
Adjusted net profit margin 11.28% 9.98% 8.47% 8.95% 10.27%
Total Asset Turnover
Reported total asset turnover 0.98 1.00 0.98 0.97 0.90
Adjusted total asset turnover 0.98 1.01 0.98 0.97 0.90
Financial Leverage
Reported financial leverage 5.83 6.18 7.28 8.48 5.65
Adjusted financial leverage 5.13 5.29 6.07 6.56 4.63
Return on Equity (ROE)
Reported ROE 66.19% 64.29% 65.12% 76.50% 56.23%
Adjusted ROE 56.77% 53.22% 50.59% 56.77% 42.95%
Return on Assets (ROA)
Reported ROA 11.35% 10.41% 8.94% 9.02% 9.95%
Adjusted ROA 11.06% 10.05% 8.33% 8.66% 9.27%

Based on: 10-K (reporting date: 2024-12-31), 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).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Sherwin-Williams Co. adjusted net profit margin ratio improved from 2022 to 2023 and from 2023 to 2024.
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 2022 to 2023 but then deteriorated significantly from 2023 to 2024.
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.		 Sherwin-Williams Co. adjusted financial leverage ratio decreased from 2022 to 2023 and from 2023 to 2024.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Sherwin-Williams Co. adjusted ROE improved from 2022 to 2023 and from 2023 to 2024.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Sherwin-Williams Co. adjusted ROA improved from 2022 to 2023 and from 2023 to 2024.

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

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in thousands)
Net income 2,681,400 2,388,800 2,020,100 1,864,400 2,030,400
Net sales 23,098,500 23,051,900 22,148,900 19,944,600 18,361,700
Profitability Ratio
Net profit margin1 11.61% 10.36% 9.12% 9.35% 11.06%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income 2,606,500 2,299,900 1,875,300 1,784,100 1,885,100
Net sales 23,098,500 23,051,900 22,148,900 19,944,600 18,361,700
Profitability Ratio
Adjusted net profit margin2 11.28% 9.98% 8.47% 8.95% 10.27%

Based on: 10-K (reporting date: 2024-12-31), 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).

2024 Calculations

1 Net profit margin = 100 × Net income ÷ Net sales
= 100 × 2,681,400 ÷ 23,098,500 = 11.61%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Net sales
= 100 × 2,606,500 ÷ 23,098,500 = 11.28%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Sherwin-Williams Co. adjusted net profit margin ratio improved from 2022 to 2023 and from 2023 to 2024.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in thousands)
Net sales 23,098,500 23,051,900 22,148,900 19,944,600 18,361,700
Total assets 23,632,600 22,954,400 22,594,000 20,666,700 20,401,600
Activity Ratio
Total asset turnover1 0.98 1.00 0.98 0.97 0.90
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Net sales 23,098,500 23,051,900 22,148,900 19,944,600 18,361,700
Adjusted total assets 23,565,100 22,877,400 22,517,000 20,603,900 20,334,000
Activity Ratio
Adjusted total asset turnover2 0.98 1.01 0.98 0.97 0.90

Based on: 10-K (reporting date: 2024-12-31), 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).

2024 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 23,098,500 ÷ 23,632,600 = 0.98

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 23,098,500 ÷ 23,565,100 = 0.98

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 2022 to 2023 but then deteriorated significantly from 2023 to 2024.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in thousands)
Total assets 23,632,600 22,954,400 22,594,000 20,666,700 20,401,600
Shareholders’ equity 4,051,200 3,715,800 3,102,100 2,437,200 3,610,800
Solvency Ratio
Financial leverage1 5.83 6.18 7.28 8.48 5.65
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets 23,565,100 22,877,400 22,517,000 20,603,900 20,334,000
Adjusted shareholders’ equity 4,591,200 4,321,900 3,706,700 3,142,600 4,389,300
Solvency Ratio
Adjusted financial leverage2 5.13 5.29 6.07 6.56 4.63

Based on: 10-K (reporting date: 2024-12-31), 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).

2024 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity
= 23,632,600 ÷ 4,051,200 = 5.83

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 23,565,100 ÷ 4,591,200 = 5.13

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.		 Sherwin-Williams Co. adjusted financial leverage ratio decreased from 2022 to 2023 and from 2023 to 2024.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in thousands)
Net income 2,681,400 2,388,800 2,020,100 1,864,400 2,030,400
Shareholders’ equity 4,051,200 3,715,800 3,102,100 2,437,200 3,610,800
Profitability Ratio
ROE1 66.19% 64.29% 65.12% 76.50% 56.23%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income 2,606,500 2,299,900 1,875,300 1,784,100 1,885,100
Adjusted shareholders’ equity 4,591,200 4,321,900 3,706,700 3,142,600 4,389,300
Profitability Ratio
Adjusted ROE2 56.77% 53.22% 50.59% 56.77% 42.95%

Based on: 10-K (reporting date: 2024-12-31), 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).

2024 Calculations

1 ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × 2,681,400 ÷ 4,051,200 = 66.19%

2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted shareholders’ equity
= 100 × 2,606,500 ÷ 4,591,200 = 56.77%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Sherwin-Williams Co. adjusted ROE improved from 2022 to 2023 and from 2023 to 2024.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in thousands)
Net income 2,681,400 2,388,800 2,020,100 1,864,400 2,030,400
Total assets 23,632,600 22,954,400 22,594,000 20,666,700 20,401,600
Profitability Ratio
ROA1 11.35% 10.41% 8.94% 9.02% 9.95%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income 2,606,500 2,299,900 1,875,300 1,784,100 1,885,100
Adjusted total assets 23,565,100 22,877,400 22,517,000 20,603,900 20,334,000
Profitability Ratio
Adjusted ROA2 11.06% 10.05% 8.33% 8.66% 9.27%

Based on: 10-K (reporting date: 2024-12-31), 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).

2024 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 2,681,400 ÷ 23,632,600 = 11.35%

2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 2,606,500 ÷ 23,565,100 = 11.06%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Sherwin-Williams Co. adjusted ROA improved from 2022 to 2023 and from 2023 to 2024.