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Western Digital Corp (NAS:WDC)
Goodwill to Asset Ratio
0.19 (As of Jun. 2014)

Goodwill to Asset ratio measures how much goodwill a company is recording compared to the total level of its assets. Western Digital Corp's intangibles for the quarter that ended in Jun. 2014 was $3,013 Mil. Western Digital Corp's total assets for the quarter that ended in Jun. 2014 was $15,499 Mil. Therefore, Western Digital Corp's Goodwill to Asset Ratio for the quarter that ended in Jun. 2014 was 0.19.


Definition

Goodwill to Asset ratio measures how much goodwill a company is recording compared to the total level of its assets.

It is calculated by dividing total intangibles assets by total assets.

Western Digital Corp's Goodwill to Asset Ratio for the fiscal year that ended in Jun. 2014 is calculated as

Goodwill to Asset (A: Jun. 2014 )=Intangibles/Total Assets
=3013/15499
=0.19

Western Digital Corp's Goodwill to Asset Ratio for the quarter that ended in Jun. 2014 is calculated as

Goodwill to Asset (Q: Jun. 2014 )=Intangibles/Total Assets
=3013/15499
=0.19

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

If the goodwill-to-asset ratio increases, it can mean that the company is recording a proportionately higher amount of goodwill, assuming total assets are remaining constant. It is generally good to see a company increasing its assets regularly; however, if these increases are coming from intangible assets, such as goodwill, the increases may not be as good.

Increases in the goodwill-to-asset ratio might suggest that a company has been aggressively acquiring other firms or has seen its tangible assets decrease in value. When a large portion of total assets are attributable to intangible assets (such as goodwill), the company may be at risk of having that portion of its asset base wiped out quickly if it must record any goodwill impairments. Decreases in the goodwill-to-assets ratio suggest that the company has either written down some goodwill or increased its tangible assets.

Asset needs vary from industry to industry. This is why comparing goodwill-to-assets ratios is generally most meaningful among companies within the same industry. By comparing a company's goodwill to assets ratio to those of other companies within the same industry, investors can get a feel for how a company is managing its goodwill.


Related Terms

Total Assets, Intangibles


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Western Digital Corp Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
goodwill2asset 0.010.000.000.040.040.030.030.200.180.19

Western Digital Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
goodwill2asset 0.190.200.190.190.190.180.180.210.200.19
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