Broadcom Financial Analysis Part 3: More than half of assets are "fat (goodwill)"? The trap of acquisition premiums hidden in Note 4 of the B/S and the patent expiration dates
ICHIRO|Financial Statement Dissection Lab
Last time, Broadcom restrained internal costs to the extreme in response to a sharp rise in sales, exposing the abnormality of the income statement (P/L) that produced an astonishing “operating margin of 49%” that is out of step with standard business practice in manufacturing.
Without taking the risk of innovation (from 0 to 1) within their own company, they harvest “tolls” by acquiring others’ infrastructure through M&A—. This cold-hearted management style distorted the balance sheet’s asset structure, their balance sheet listed as a wealth ledger, turning it into an extremely distorted physique.
Past articles available here?