Analysis of Income Taxes
- Income Tax Expense (Benefit)
- Effective Income Tax Rate (EITR)
- Components of Deferred Tax Assets and Liabilities
- Deferred Tax Assets and Liabilities, Classification
- Adjustments to Financial Statements: Removal of Deferred Taxes
- Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
- Adjusted Net Profit Margin
- Adjusted Total Asset Turnover
- Adjusted Financial Leverage
- Adjusted Return on Equity (ROE)
- Adjusted Return on Assets (ROA)
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- Income Statement
- Statement of Comprehensive Income
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Operating Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
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Income Tax Expense (Benefit)
Texas Instruments Inc., income tax expense (benefit), continuing operations
US$ in millions
| 12 months ended: | Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||||||
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| Provision for income taxes |
Based on: 10-K (reporting date: 2025-12-31), 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).
The provision for income taxes exhibited fluctuations over the five-year period. Current income tax expense generally decreased, while deferred tax expense transitioned from a benefit to an expense and then back to a benefit. A detailed examination of these components reveals specific trends.
- Current Income Taxes
- Current income tax expense decreased from US$1,135 million in 2021 to US$728 million in 2024, representing a cumulative decline. A moderate increase was observed in 2022 to US$1,474 million before declining in subsequent years. This suggests a correlation with potential changes in pre-tax income or applicable tax rates.
- Deferred Income Taxes
- Deferred income tax expense demonstrated significant volatility. A benefit of US$191 million was recorded in 2022, followed by expenses of US$299 million and US$210 million in 2023 and 2024, respectively. In 2025, a benefit of US$19 million was recorded. These fluctuations likely stem from changes in temporary differences between the book and tax bases of assets and liabilities, or changes in tax laws affecting deferred tax assets and liabilities.
- Total Provision for Income Taxes
- The total provision for income taxes followed a decreasing trend overall, moving from US$1,150 million in 2021 to US$709 million in 2025. The decrease was not linear, with an increase observed in 2022 to US$1,283 million. The interplay between current and deferred tax components significantly influenced the total provision each year. The substantial deferred tax expense in 2023 and 2024 partially offset the decline in current tax expense, while the deferred tax benefit in 2025 contributed to the overall reduction in the total provision.
The significant changes in deferred tax expense warrant further investigation to understand the underlying causes and potential impact on future tax liabilities. The decreasing trend in current tax expense, coupled with the fluctuating deferred tax component, suggests a dynamic tax position requiring ongoing monitoring.
Effective Income Tax Rate (EITR)
Texas Instruments Inc., effective income tax rate (EITR) reconciliation
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| U.S. statutory income tax rate | ||||||
| Effective tax rate |
Based on: 10-K (reporting date: 2025-12-31), 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).
The effective income tax rate exhibited a generally decreasing trend over the five-year period, followed by a slight increase in the final year. While the U.S. statutory income tax rate remained constant at 21.00%, the effective tax rate fluctuated below this level throughout the observed timeframe.
- Effective Tax Rate Trend
- The effective tax rate began at 12.90% in 2021 and decreased to 12.00% in 2024. This represents a cumulative decrease of 0.90 percentage points over three years. A modest increase to 12.40% was then observed in 2025, reversing the prior downward trajectory.
The consistent difference between the statutory and effective tax rates suggests the presence of factors reducing the company’s tax burden. These factors could include tax credits, deductions, foreign income, or differing tax rates in jurisdictions where the company operates. The slight increase in the effective tax rate in 2025 warrants further investigation to determine the underlying cause, such as a shift in the geographic distribution of income or changes in applicable tax laws.
- Year-over-Year Changes
- From 2021 to 2022, the effective tax rate decreased by 0.10 percentage points. A further decrease of 0.60 percentage points occurred between 2022 and 2023. The largest year-over-year change was a decrease of 0.20 percentage points from 2023 to 2024. Finally, the effective tax rate increased by 0.40 percentage points from 2024 to 2025.
The relatively small magnitude of the changes in the effective tax rate each year suggests a degree of stability in the company’s tax position, despite the overall downward trend and subsequent slight increase. Continued monitoring of the effective tax rate is recommended to identify any significant deviations from the observed pattern and to assess the impact of potential changes in the tax environment.
Components of Deferred Tax Assets and Liabilities
Texas Instruments Inc., components of deferred tax assets and liabilities
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
The composition of deferred tax assets and liabilities exhibits notable shifts over the five-year period. A significant increase in deferred tax assets is observed, driven primarily by capitalized research and development expenses, stock compensation, and accrued expenses. Conversely, deferred tax liabilities are largely influenced by property, plant, and equipment, and more recently, the impact of CHIPS Act incentives.
- Capitalized Research & Development
- Capitalized research and development expenses represent a growing component of deferred tax assets, increasing from US$380 million in 2022 to US$1,076 million in 2024 before decreasing slightly to US$1,019 million in 2025. This growth suggests an increasing level of qualifying R&D activities, impacting future tax obligations.
- Stock Compensation
- Deferred tax assets related to stock compensation demonstrate consistent growth, rising from US$110 million in 2021 to US$226 million in 2025. This increase correlates with the company’s equity-based compensation programs and their associated tax benefits.
- Valuation Allowance
- The valuation allowance against deferred tax assets has steadily increased throughout the period, from US$188 million in 2021 to US$230 million in 2025. This suggests a growing uncertainty regarding the realization of a portion of the deferred tax assets, potentially due to concerns about future profitability or changes in tax laws.
- Property, Plant & Equipment
- Deferred tax liabilities stemming from property, plant, and equipment represent a substantial portion of the total liabilities. These liabilities decreased from US$197 million in 2021 to US$441 million in 2024, before stabilizing at US$443 million in 2025. This suggests a reduction in temporary differences related to depreciable assets.
- CHIPS Act Incentives
- The introduction of CHIPS Act incentives in 2024 and 2025 created new deferred tax liabilities of US$336 million and US$299 million respectively. These liabilities reflect the future tax implications of these government incentives.
- Net Deferred Tax Position
- The net deferred tax position transitioned from a net asset of US$176 million in 2021 to a net asset of US$901 million in 2025. This indicates a strengthening of the company’s deferred tax asset position over time, despite the increasing valuation allowance.
Accrued expenses, deferred loss and tax credit carryforwards, inventories, and other components of both assets and liabilities remained relatively stable or exhibited moderate growth, contributing to the overall trends but not representing dominant factors. International earnings consistently contribute to deferred tax liabilities, though at a relatively small scale.
Deferred Tax Assets and Liabilities, Classification
Texas Instruments Inc., deferred tax assets and liabilities, classification
US$ in millions
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Deferred tax assets | ||||||
| Deferred tax liabilities |
Based on: 10-K (reporting date: 2025-12-31), 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).
The deferred tax asset balance has exhibited a consistent upward trend over the five-year period. Conversely, the deferred tax liability balance has generally decreased, though with some fluctuation. This suggests a growing potential for future tax benefits relative to future tax obligations.
- Deferred Tax Assets
- The deferred tax asset balance increased significantly from US$263 million in 2021 to US$473 million in 2022, representing an 80.2% increase. This growth continued at a more moderate pace, reaching US$757 million in 2023, US$936 million in 2024, and US$967 million in 2025. The rate of increase slowed in the later years, indicating a potential stabilization of factors contributing to these assets.
- Deferred Tax Liabilities
- The deferred tax liability balance decreased from US$87 million in 2021 to US$66 million in 2022, a decline of approximately 24.1%. It further decreased to US$63 million in 2023 and US$53 million in 2024, before increasing slightly to US$66 million in 2025. The overall trend indicates a reduction in future tax obligations arising from temporary differences.
The widening gap between deferred tax assets and deferred tax liabilities suggests a net deferred tax asset position is developing. This could be attributable to various factors, including increased tax loss carryforwards, temporary differences related to depreciation, or other deductible items recognized for tax purposes before they are recognized for financial reporting purposes. Further investigation into the specific components of these deferred tax items would be necessary to fully understand the underlying drivers.
Adjustments to Financial Statements: Removal of Deferred Taxes
Texas Instruments Inc., adjustments to financial statements
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
The financial information reveals adjustments made to reported figures, primarily relating to the removal of deferred tax assets and liabilities. These adjustments consistently impact total assets, total liabilities, and stockholders’ equity over the five-year period from 2021 to 2025. A consistent pattern emerges where the adjusted values are lower than the reported values for each of these balance sheet items.
- Total Assets
- Reported total assets demonstrate an increasing trend from $24,676 million in 2021 to $35,509 million in 2024, followed by a slight decrease to $34,585 million in 2025. The adjusted total assets follow a similar trajectory, increasing from $24,413 million in 2021 to $34,573 million in 2024, and decreasing to $33,618 million in 2025. The difference between reported and adjusted total assets widens from $263 million in 2021 to $936 million in 2024, before narrowing slightly to $967 million in 2025. This suggests a growing, then stabilizing, impact from the deferred tax adjustments on the overall asset base.
- Total Liabilities
- Reported total liabilities exhibit a consistent upward trend, increasing from $11,343 million in 2021 to $18,606 million in 2024, with a minor decrease to $18,312 million in 2025. Adjusted total liabilities mirror this trend, rising from $11,256 million in 2021 to $18,553 million in 2024, and decreasing to $18,246 million in 2025. The gap between reported and adjusted liabilities increases from $87 million in 2021 to $53 million in 2025, indicating a relatively stable impact of deferred tax adjustments on the liability side of the balance sheet.
- Stockholders’ Equity
- Reported stockholders’ equity increases from $13,333 million in 2021 to $16,903 million in 2024, then declines to $16,273 million in 2025. Adjusted stockholders’ equity follows a similar pattern, increasing from $13,157 million in 2021 to $16,020 million in 2024, and decreasing to $15,372 million in 2025. The difference between reported and adjusted equity grows from $176 million in 2021 to $883 million in 2024, before decreasing to $901 million in 2025. This suggests a significant, and then relatively stable, impact from deferred tax adjustments on the reported equity position.
- Net Income
- Reported net income fluctuates over the period, starting at $7,769 million in 2021, peaking at $8,749 million in 2022, declining to $6,510 million in 2023, then further to $4,799 million in 2024, and recovering slightly to $5,001 million in 2025. Adjusted net income mirrors this trend, with values of $7,784 million, $8,558 million, $6,211 million, $4,589 million, and $4,982 million for the same years respectively. The adjustments to net income are relatively small, ranging from an increase of $15 million in 2021 to a decrease of $201 million in 2024. This indicates that the deferred tax adjustments have a limited direct impact on reported profitability.
In summary, the adjustments consistently reduce reported asset, liability, and equity values. The impact on total assets and stockholders’ equity appears more substantial than on total liabilities. The adjustments to net income are comparatively minor, suggesting the primary effect of these adjustments is on the balance sheet rather than the income statement.
Texas Instruments Inc., Financial Data: Reported vs. Adjusted
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Texas Instruments Inc., adjusted financial ratios
Based on: 10-K (reporting date: 2025-12-31), 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).
The financial performance, as indicated by several key ratios, demonstrates a generally declining trend from 2021 through 2024, with a slight stabilization in 2025. The adjustments made by removing deferred tax impacts result in minor, but consistent, shifts in these ratios. Generally, the adjusted ratios are slightly higher than their reported counterparts, suggesting that deferred tax liabilities are suppressing the reported figures.
- Profitability
- Reported net profit margin decreased consistently from 42.35% in 2021 to 28.28% in 2025. The adjusted net profit margin mirrors this decline, moving from 42.43% to 28.18% over the same period. The difference between reported and adjusted margins remains relatively small, fluctuating between 0.08% and 0.24% annually. This indicates that deferred taxes have a limited impact on the overall profitability picture.
- Asset Efficiency
- Total asset turnover, both reported and adjusted, exhibits a similar pattern of decline. Reported turnover decreased from 0.74 in 2021 and 2022 to 0.44 in 2024, before a modest recovery to 0.51 in 2025. The adjusted ratio follows this trend closely, with values consistently slightly higher. The adjustments suggest a marginally more efficient use of assets when deferred tax effects are excluded, but the core trend remains the same.
- Financial Leverage
- Financial leverage increased steadily from 1.85 in 2021 to 2.13 in 2025 for the reported ratio. The adjusted ratio shows a similar upward trend, ranging from 1.86 to 2.19. The adjustments result in slightly higher leverage ratios, indicating that deferred tax liabilities are reducing the apparent level of financial risk. The increase in leverage suggests a greater reliance on debt financing over the period.
- Return on Equity (ROE)
- Reported ROE experienced a substantial decrease from 58.27% in 2021 to 30.73% in 2025. The adjusted ROE follows a similar trajectory, declining from 59.16% to 32.41%. The adjustments provide a slightly elevated ROE figure in each year, but do not alter the overall downward trend. The decline in ROE is consistent with the decreasing profitability and, to a lesser extent, the declining asset turnover.
- Return on Assets (ROA)
- Reported ROA also decreased significantly, from 31.48% in 2021 to 14.46% in 2025. The adjusted ROA mirrors this decline, moving from 31.88% to 14.82%. The adjustments result in slightly higher ROA values, but the overall trend remains consistent. The decline in ROA suggests a diminishing ability to generate profits from the company’s assets.
In summary, the removal of deferred tax effects results in modest increases to the calculated ratios, but does not fundamentally change the observed trends. The overall picture indicates a decline in profitability, asset efficiency, and returns on both equity and assets between 2021 and 2025, with a potential stabilization in 2025.
Texas Instruments Inc., Financial Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2025-12-31), 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).
2025 Calculations
1 Net profit margin = 100 × Net income ÷ Revenue
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × ÷ =
The reported and adjusted net income figures demonstrate fluctuations over the five-year period. While both metrics generally move in tandem, a consistent difference exists between them, suggesting the presence of certain non-recurring or unusual items impacting reported earnings. The analysis focuses on the trends observed in the net profit margins, both reported and adjusted.
- Adjusted Net Profit Margin Trend
- The adjusted net profit margin exhibited a relatively stable performance between 2021 and 2022, holding around 42.4%. A noticeable decline commenced in 2023, falling to 35.45%, and continued through 2024, reaching 29.34%. The rate of decline slowed in 2025, with the margin settling at 28.18%. This suggests increasing cost pressures or decreasing revenue growth relative to costs in the latter part of the period.
- Comparison of Reported and Adjusted Margins
- The difference between the reported and adjusted net profit margins remained relatively small throughout the observed period, generally less than 0.4 percentage points. This indicates that the adjustments made to arrive at adjusted net income are not materially altering the overall profitability picture. However, the consistent presence of an adjustment suggests the need for further investigation into the nature of these items to understand their impact on earnings quality.
- Overall Margin Decline
- Both reported and adjusted net profit margins experienced a downward trend from 2021 to 2025. The most significant decrease occurred between 2022 and 2024. While the decline moderated in 2025, the margin remained substantially lower than the levels observed in the earlier years of the period. This sustained decrease warrants further scrutiny to determine the underlying drivers and potential implications for future profitability.
In summary, the company experienced a consistent decline in both reported and adjusted net profit margins over the five-year period. The adjustments made to net income do not appear to be significantly impacting the overall margin trend. The observed decline suggests a potential shift in the company’s cost structure or revenue generation capabilities, requiring further investigation.
Adjusted Total Asset Turnover
Based on: 10-K (reporting date: 2025-12-31), 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).
2025 Calculations
1 Total asset turnover = Revenue ÷ Total assets
= ÷ =
2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= ÷ =
The analysis reveals trends in total asset figures and associated turnover ratios over a five-year period. Reported total assets generally increased from 2021 to 2023, with a slight decrease in 2025. Adjusted total assets mirrored this pattern, exhibiting similar growth and a subsequent decline. Both reported and adjusted total asset turnover ratios demonstrate a declining trend from 2021 through 2024, followed by a modest increase in 2025.
- Reported Total Assets
- Reported total assets increased from US$24,676 million in 2021 to US$32,348 million in 2023, representing a substantial growth period. However, assets decreased to US$35,509 million in 2024 and further to US$34,585 million in 2025, indicating a potential stabilization or slight contraction in the asset base.
- Adjusted Total Assets
- Adjusted total assets followed a similar trajectory to reported total assets. Growth occurred from US$24,413 million in 2021 to US$31,591 million in 2023, followed by a peak of US$34,573 million in 2024 and a decrease to US$33,618 million in 2025. The adjusted figures are consistently lower than the reported figures, suggesting potential differences in asset valuation or inclusion criteria.
- Reported Total Asset Turnover
- The reported total asset turnover ratio decreased from 0.74 in both 2021 and 2022 to 0.54 in 2023 and further to 0.44 in 2024. This indicates a diminishing ability to generate sales revenue from each dollar of assets. A slight recovery to 0.51 in 2025 suggests a potential stabilization, but the ratio remains significantly lower than in the earlier years of the period.
- Adjusted Total Asset Turnover
- The adjusted total asset turnover ratio mirrors the trend observed in the reported ratio, declining from 0.75 in 2021 and 2022 to 0.55 in 2023 and 0.45 in 2024. Similar to the reported ratio, it experienced a modest increase to 0.53 in 2025. The consistency between the reported and adjusted turnover ratios suggests that the differences in total asset figures do not substantially impact the overall efficiency metric.
The observed decline in both reported and adjusted total asset turnover ratios warrants further investigation. Potential contributing factors could include decreased sales, increased asset intensity, or changes in accounting practices. The slight recovery in 2025 may indicate early signs of improved efficiency, but continued monitoring is necessary to confirm a sustained trend.
Adjusted Financial Leverage
Based on: 10-K (reporting date: 2025-12-31), 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).
2025 Calculations
1 Financial leverage = Total assets ÷ Stockholders’ equity
= ÷ =
2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= ÷ =
An examination of the financial information reveals a consistent pattern of increasing financial leverage, both reported and adjusted, over the five-year period. Both total assets and stockholders’ equity demonstrate growth, but the increase in assets outpaces the increase in equity, contributing to the observed leverage trend.
- Adjusted Financial Leverage
- Adjusted financial leverage exhibits a steady upward trajectory, beginning at 1.86 in 2021 and reaching 2.19 in 2025. This indicates a growing reliance on debt or other forms of financing relative to adjusted equity. The increase from 2023 to 2024 is notably larger than other periods, moving from 1.95 to 2.16.
The difference between reported and adjusted figures for both total assets and stockholders’ equity is relatively small and consistent across all years. This suggests that the adjustments being made are not materially altering the overall picture of the company’s financial position. The adjusted leverage ratio consistently remains slightly higher than the reported leverage ratio, indicating that the adjustments result in a marginally higher leverage position.
- Asset and Equity Trends
- Reported total assets increased from US$24,676 million in 2021 to US$35,509 million in 2024, before decreasing slightly to US$34,585 million in 2025. Reported stockholders’ equity experienced growth from US$13,333 million to US$16,903 million between 2021 and 2024, followed by a decrease to US$16,273 million in 2025. Adjusted assets and equity mirror these trends, though the absolute values differ due to the adjustments.
The consistent increase in financial leverage, coupled with the growth in assets, suggests potential expansion or investment activities. The slight decrease in both assets and equity in 2025 warrants further investigation to determine the underlying causes and potential implications.
- Year-over-Year Changes
- The largest year-over-year increase in adjusted financial leverage occurred between 2023 and 2024, with a change of 0.21. All other year-over-year increases were between 0.02 and 0.06. This suggests a significant shift in the company’s capital structure during that period.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2025-12-31), 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).
2025 Calculations
1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted stockholders’ equity
= 100 × ÷ =
The period between 2021 and 2025 demonstrates fluctuations in both reported and adjusted net income, alongside increasing and then slightly decreasing stockholders’ equity. These movements influence reported and adjusted return on equity (ROE) values. A general observation is that adjusted ROE closely mirrors reported ROE, suggesting that adjustments to net income and stockholders’ equity have a limited impact on the overall ROE calculation.
- Net Income Trends
- Reported net income increased from US$7,769 million in 2021 to US$8,749 million in 2022, before declining to US$6,510 million in 2023 and further to US$4,799 million in 2024. A slight recovery to US$5,001 million is observed in 2025. Adjusted net income follows a similar pattern, with a peak in 2022 and subsequent declines, ultimately showing a similar modest increase in 2025.
- Stockholders’ Equity Trends
- Reported stockholders’ equity consistently increased from US$13,333 million in 2021 to US$16,897 million in 2023. Growth slowed in 2024, remaining relatively stable at US$16,903 million, and then decreased slightly to US$16,273 million in 2025. Adjusted stockholders’ equity exhibits a comparable trend, mirroring the increases and the stabilization/slight decline observed in reported equity.
- Reported ROE Analysis
- Reported ROE peaked at 60.02% in 2022, coinciding with the highest reported net income. A substantial decrease is then observed, falling to 38.53% in 2023 and 28.39% in 2024, reflecting the declines in net income. A modest increase to 30.73% is seen in 2025, aligning with the slight recovery in reported net income.
- Adjusted ROE Analysis
- Adjusted ROE closely follows the trend of reported ROE. It reached a high of 60.40% in 2022, decreased to 38.33% in 2023 and 28.65% in 2024, and then increased to 32.41% in 2025. The differences between reported and adjusted ROE remain relatively small throughout the period, generally less than 0.3 percentage points in any given year.
The observed declines in both reported and adjusted ROE from 2022 to 2024 are primarily driven by the reduction in net income. While stockholders’ equity generally increased during this period, the decrease in profitability outweighed the impact of the equity growth on ROE. The slight recovery in ROE in 2025 corresponds with the modest increase in net income.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2025-12-31), 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).
2025 Calculations
1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × ÷ =
The period between 2021 and 2025 demonstrates fluctuating performance in reported and adjusted net income, alongside increasing and then slightly decreasing total assets. Consequently, both reported and adjusted return on assets (ROA) exhibit a similar pattern of initial stability followed by a decline and subsequent modest recovery.
- Net Income Trends
- Reported net income increased from US$7,769 million in 2021 to US$8,749 million in 2022, before declining to US$6,510 million in 2023 and further to US$4,799 million in 2024. A slight increase to US$5,001 million is observed in 2025. Adjusted net income follows a similar trajectory, with values of US$7,784 million, US$8,558 million, US$6,211 million, US$4,589 million, and US$4,982 million for the same years respectively. The difference between reported and adjusted net income remains relatively small throughout the period.
- Asset Trends
- Reported total assets increased consistently from US$24,676 million in 2021 to US$35,509 million in 2024, before decreasing slightly to US$34,585 million in 2025. Adjusted total assets show a similar pattern, rising from US$24,413 million in 2021 to US$34,573 million in 2024, and then decreasing to US$33,618 million in 2025. The adjusted total assets are consistently lower than the reported total assets.
- Reported ROA Analysis
- Reported ROA peaked at 32.16% in 2022, following 31.48% in 2021. A substantial decrease is then observed, with ROA falling to 20.12% in 2023 and 13.51% in 2024. A modest recovery to 14.46% is seen in 2025. This decline largely correlates with the decrease in reported net income, despite the increasing asset base.
- Adjusted ROA Analysis
- Adjusted ROA mirrors the trend of reported ROA, starting at 31.88% in 2021 and reaching 32.01% in 2022. It then declines to 19.66% in 2023 and 13.27% in 2024, before increasing slightly to 14.82% in 2025. The adjusted ROA values are consistently slightly higher than the reported ROA values, reflecting the adjustments made to net income and total assets. The correlation between adjusted ROA and the net income and asset trends is strong.
In summary, the period is characterized by a peak in profitability in 2022, followed by a decline in both net income and ROA, and a slight recovery in 2025. The asset base generally increased throughout the period, but the decline in profitability outweighed the asset growth in terms of ROA performance.