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)

Stryker Corp., balance sheet: goodwill and intangible assets

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Goodwill	12,918)	12,778)	9,069)	8,563)	7,168)
Developed technologies	5,326)	5,305)	3,731)	3,426)	2,416)
Customer relationships	2,324)	2,352)	2,160)	2,155)	2,088)
Patents	343)	346)	348)	332)	340)
Trademarks	415)	428)	362)	349)	352)
In-process research and development	29)	97)	110)	6)	25)
Other	105)	128)	125)	128)	93)
Other intangible assets, gross carrying amount	8,542)	8,656)	6,836)	6,396)	5,314)
Accumulated amortization	(3,702)	(3,102)	(2,609)	(2,233)	(1,837)
Other intangible assets, net carrying amount	4,840)	5,554)	4,227)	4,163)	3,477)
Goodwill and other intangible assets	17,758)	18,332)	13,296)	12,726)	10,645)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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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.	Stryker Corp. goodwill increased from 2019 to 2020 and from 2020 to 2021.
Other intangible assets, net carrying amount	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Stryker Corp. other intangible assets, net carrying amount increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.
Goodwill and other 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.	Stryker Corp. goodwill and other intangible assets increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.

Stryker Corp., adjustments to financial statements

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Adjustment to Total Assets
Total assets (as reported)	34,631)	34,330)	30,167)	27,229)	22,197)
Less: Goodwill	12,918)	12,778)	9,069)	8,563)	7,168)
Total assets (adjusted)	21,713)	21,552)	21,098)	18,666)	15,029)
Adjustment to Total Stryker Shareholders’ Equity
Total Stryker shareholders’ equity (as reported)	14,877)	13,084)	12,807)	11,730)	9,966)
Less: Goodwill	12,918)	12,778)	9,069)	8,563)	7,168)
Total Stryker shareholders’ equity (adjusted)	1,959)	306)	3,738)	3,167)	2,798)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Stryker Corp., Financial Data: Reported vs. Adjusted

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Stryker Corp., adjusted financial ratios

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Total Asset Turnover
Reported total asset turnover	0.49	0.42	0.49	0.50	0.56
Adjusted total asset turnover	0.79	0.67	0.71	0.73	0.83
Financial Leverage
Reported financial leverage	2.33	2.62	2.36	2.32	2.23
Adjusted financial leverage	11.08	70.43	5.64	5.89	5.37
Return on Equity (ROE)
Reported ROE	13.40%	12.22%	16.26%	30.29%	10.23%
Adjusted ROE	101.79%	522.55%	55.72%	112.19%	36.45%
Return on Assets (ROA)
Reported ROA	5.76%	4.66%	6.90%	13.05%	4.60%
Adjusted ROA	9.18%	7.42%	9.87%	19.03%	6.79%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Stryker Corp. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
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.	Stryker Corp. adjusted financial leverage ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Stryker Corp. adjusted ROE improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021 not reaching 2019 level.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Stryker Corp. adjusted ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Stryker Corp., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net sales	17,108)	14,351)	14,884)	13,601)	12,444)
Total assets	34,631)	34,330)	30,167)	27,229)	22,197)
Activity Ratio
Total asset turnover¹	0.49	0.42	0.49	0.50	0.56
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net sales	17,108)	14,351)	14,884)	13,601)	12,444)
Adjusted total assets	21,713)	21,552)	21,098)	18,666)	15,029)
Activity Ratio
Adjusted total asset turnover²	0.79	0.67	0.71	0.73	0.83

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 17,108 ÷ 34,631 = 0.49

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 17,108 ÷ 21,713 = 0.79

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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.	Stryker Corp. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Total assets	34,631)	34,330)	30,167)	27,229)	22,197)
Total Stryker shareholders’ equity	14,877)	13,084)	12,807)	11,730)	9,966)
Solvency Ratio
Financial leverage¹	2.33	2.62	2.36	2.32	2.23
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets	21,713)	21,552)	21,098)	18,666)	15,029)
Adjusted total Stryker shareholders’ equity	1,959)	306)	3,738)	3,167)	2,798)
Solvency Ratio
Adjusted financial leverage²	11.08	70.43	5.64	5.89	5.37

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Financial leverage = Total assets ÷ Total Stryker shareholders’ equity
= 34,631 ÷ 14,877 = 2.33

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Stryker shareholders’ equity
= 21,713 ÷ 1,959 = 11.08

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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.	Stryker Corp. adjusted financial leverage ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net earnings	1,994)	1,599)	2,083)	3,553)	1,020)
Total Stryker shareholders’ equity	14,877)	13,084)	12,807)	11,730)	9,966)
Profitability Ratio
ROE¹	13.40%	12.22%	16.26%	30.29%	10.23%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings	1,994)	1,599)	2,083)	3,553)	1,020)
Adjusted total Stryker shareholders’ equity	1,959)	306)	3,738)	3,167)	2,798)
Profitability Ratio
Adjusted ROE²	101.79%	522.55%	55.72%	112.19%	36.45%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROE = 100 × Net earnings ÷ Total Stryker shareholders’ equity
= 100 × 1,994 ÷ 14,877 = 13.40%

² Adjusted ROE = 100 × Net earnings ÷ Adjusted total Stryker shareholders’ equity
= 100 × 1,994 ÷ 1,959 = 101.79%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Stryker Corp. adjusted ROE improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021 not reaching 2019 level.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net earnings	1,994)	1,599)	2,083)	3,553)	1,020)
Total assets	34,631)	34,330)	30,167)	27,229)	22,197)
Profitability Ratio
ROA¹	5.76%	4.66%	6.90%	13.05%	4.60%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net earnings	1,994)	1,599)	2,083)	3,553)	1,020)
Adjusted total assets	21,713)	21,552)	21,098)	18,666)	15,029)
Profitability Ratio
Adjusted ROA²	9.18%	7.42%	9.87%	19.03%	6.79%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROA = 100 × Net earnings ÷ Total assets
= 100 × 1,994 ÷ 34,631 = 5.76%

² Adjusted ROA = 100 × Net earnings ÷ Adjusted total assets
= 100 × 1,994 ÷ 21,713 = 9.18%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Stryker Corp. adjusted ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Stryker Corp. (NYSE:SYK)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Stryker Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Stryker Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)