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)

Sherwin-Williams Co., balance sheet: inventory

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Finished goods	1,810,900)	1,957,700)	1,378,800)	1,427,600)	1,509,600)
Work in process and raw materials	518,900)	668,800)	548,400)	376,500)	380,000)
Inventories	2,329,800)	2,626,500)	1,927,200)	1,804,100)	1,889,600)

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
Inventories	Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer.	Sherwin-Williams Co. inventories increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Adjusting LIFO Inventory to FIFO (Current) Cost

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Adjustment to Inventories
Inventories at LIFO (as reported)	2,329,800)	2,626,500)	1,927,200)	1,804,100)	1,889,600)
Add: Inventory LIFO reserve	668,000)	792,700)	593,000)	312,100)	339,800)
Inventories at FIFO (adjusted)	2,997,800)	3,419,200)	2,520,200)	2,116,200)	2,229,400)
Adjustment to Current Assets
Current assets (as reported)	5,512,900)	5,907,700)	5,053,700)	4,591,400)	4,631,700)
Add: Inventory LIFO reserve	668,000)	792,700)	593,000)	312,100)	339,800)
Current assets (adjusted)	6,180,900)	6,700,400)	5,646,700)	4,903,500)	4,971,500)
Adjustment to Total Assets
Total assets (as reported)	22,954,400)	22,594,000)	20,666,700)	20,401,600)	20,496,200)
Add: Inventory LIFO reserve	668,000)	792,700)	593,000)	312,100)	339,800)
Total assets (adjusted)	23,622,400)	23,386,700)	21,259,700)	20,713,700)	20,836,000)
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported)	3,715,800)	3,102,100)	2,437,200)	3,610,800)	4,123,300)
Add: Inventory LIFO reserve	668,000)	792,700)	593,000)	312,100)	339,800)
Shareholders’ equity (adjusted)	4,383,800)	3,894,800)	3,030,200)	3,922,900)	4,463,100)
Adjustment to Net Income
Net income (as reported)	2,388,800)	2,020,100)	1,864,400)	2,030,400)	1,541,300)
Add: Increase (decrease) in inventory LIFO reserve	(124,700)	199,700)	280,900)	(27,700)	(37,300)
Net income (adjusted)	2,264,100)	2,219,800)	2,145,300)	2,002,700)	1,504,000)

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. inventory value on Dec 31, 2023 would be $2,997,800) (in thousands) if the FIFO inventory method was used instead of LIFO. Sherwin-Williams Co. inventories, valued on a LIFO basis, on Dec 31, 2023 were $2,329,800). Sherwin-Williams Co. inventories would have been $668,000) higher than reported on Dec 31, 2023 if the FIFO method had been used instead.

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
Current Ratio
Reported current ratio (LIFO)	0.83	0.99	0.88	1.00	1.02
Adjusted current ratio (FIFO)	0.93	1.12	0.99	1.07	1.10
Net Profit Margin
Reported net profit margin (LIFO)	10.36%	9.12%	9.35%	11.06%	8.61%
Adjusted net profit margin (FIFO)	9.82%	10.02%	10.76%	10.91%	8.40%
Total Asset Turnover
Reported total asset turnover (LIFO)	1.00	0.98	0.97	0.90	0.87
Adjusted total asset turnover (FIFO)	0.98	0.95	0.94	0.89	0.86
Financial Leverage
Reported financial leverage (LIFO)	6.18	7.28	8.48	5.65	4.97
Adjusted financial leverage (FIFO)	5.39	6.00	7.02	5.28	4.67
Return on Equity (ROE)
Reported ROE (LIFO)	64.29%	65.12%	76.50%	56.23%	37.38%
Adjusted ROE (FIFO)	51.65%	56.99%	70.80%	51.05%	33.70%
Return on Assets (ROA)
Reported ROA (LIFO)	10.41%	8.94%	9.02%	9.95%	7.52%
Adjusted ROA (FIFO)	9.58%	9.49%	10.09%	9.67%	7.22%

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 current ratio	A liquidity ratio calculated as adjusted current assets divided by current liabilities.	Sherwin-Williams Co. adjusted current ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Sherwin-Williams Co. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
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 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 2021 to 2022 and from 2022 to 2023.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Sherwin-Williams Co. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Sherwin-Williams Co. adjusted ROA deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

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)
Current assets	5,512,900)	5,907,700)	5,053,700)	4,591,400)	4,631,700)
Current liabilities	6,626,900)	5,960,700)	5,719,500)	4,594,400)	4,521,900)
Liquidity Ratio
Current ratio¹	0.83	0.99	0.88	1.00	1.02
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Adjusted current assets	6,180,900)	6,700,400)	5,646,700)	4,903,500)	4,971,500)
Current liabilities	6,626,900)	5,960,700)	5,719,500)	4,594,400)	4,521,900)
Liquidity Ratio
Adjusted current ratio²	0.93	1.12	0.99	1.07	1.10

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 Current ratio = Current assets ÷ Current liabilities
= 5,512,900 ÷ 6,626,900 = 0.83

² Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= 6,180,900 ÷ 6,626,900 = 0.93

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Liquidity ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by current liabilities.	Sherwin-Williams Co. adjusted current ratio improved from 2021 to 2022 but then deteriorated significantly 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)
Net income	2,388,800)	2,020,100)	1,864,400)	2,030,400)	1,541,300)
Net sales	23,051,900)	22,148,900)	19,944,600)	18,361,700)	17,900,800)
Profitability Ratio
Net profit margin¹	10.36%	9.12%	9.35%	11.06%	8.61%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Adjusted net income	2,264,100)	2,219,800)	2,145,300)	2,002,700)	1,504,000)
Net sales	23,051,900)	22,148,900)	19,944,600)	18,361,700)	17,900,800)
Profitability Ratio
Adjusted net profit margin²	9.82%	10.02%	10.76%	10.91%	8.40%

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 Net profit margin = 100 × Net income ÷ Net sales
= 100 × 2,388,800 ÷ 23,051,900 = 10.36%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Net sales
= 100 × 2,264,100 ÷ 23,051,900 = 9.82%

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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.	Sherwin-Williams Co. adjusted net profit margin ratio deteriorated 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)
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: After Conversion from LIFO to FIFO
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	23,622,400)	23,386,700)	21,259,700)	20,713,700)	20,836,000)
Activity Ratio
Adjusted total asset turnover²	0.98	0.95	0.94	0.89	0.86

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 ÷ 23,622,400 = 0.98

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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: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Adjusted total assets	23,622,400)	23,386,700)	21,259,700)	20,713,700)	20,836,000)
Adjusted shareholders’ equity	4,383,800)	3,894,800)	3,030,200)	3,922,900)	4,463,100)
Solvency Ratio
Adjusted financial leverage²	5.39	6.00	7.02	5.28	4.67

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
= 23,622,400 ÷ 4,383,800 = 5.39

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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.	Sherwin-Williams Co. adjusted financial leverage ratio decreased 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)
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: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Adjusted net income	2,264,100)	2,219,800)	2,145,300)	2,002,700)	1,504,000)
Adjusted shareholders’ equity	4,383,800)	3,894,800)	3,030,200)	3,922,900)	4,463,100)
Profitability Ratio
Adjusted ROE²	51.65%	56.99%	70.80%	51.05%	33.70%

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 × Adjusted net income ÷ Adjusted shareholders’ equity
= 100 × 2,264,100 ÷ 4,383,800 = 51.65%

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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 deteriorated 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)
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: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Adjusted net income	2,264,100)	2,219,800)	2,145,300)	2,002,700)	1,504,000)
Adjusted total assets	23,622,400)	23,386,700)	21,259,700)	20,713,700)	20,836,000)
Profitability Ratio
Adjusted ROA²	9.58%	9.49%	10.09%	9.67%	7.22%

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 × Adjusted net income ÷ Adjusted total assets
= 100 × 2,264,100 ÷ 23,622,400 = 9.58%

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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 deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Sherwin-Williams Co. (NYSE:SHW)

Analysis of Inventory

Inventory Disclosure

Adjustment to Inventory: Conversion from LIFO to FIFO

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

Adjusted Financial Ratios: LIFO vs. FIFO (Summary)

Sherwin-Williams Co., 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)