Activision Blizzard Inc. (NASDAQ:ATVI)

Return on Assets (ROA)

The ROA data, available from March 31, 2019 onward, demonstrates a fluctuating but overall declining trend over the periods analyzed. Initially, ROA was relatively strong, exceeding 10% around the end of 2019 and early 2020, with a peak of approximately 10.26% in December 2020. Subsequently, there was a mild increase in 2021, reaching above 11% in September and December. However, from March 2022 through June 2023, ROA progressively decreased, falling to a low of 5.53% in September 2022 before a modest recovery to 7.59% by June 2023. This pattern suggests some volatility in asset profitability with a recent downward pressure on returns generated from assets.

Financial Leverage

The financial leverage ratio shows a gradual declining trend from 1.87 in March 2018, decreasing steadily to around 1.36-1.37 in the most recent quarters of 2023. The leverage ratio remained relatively stable between 1.4 and 1.55 from late 2018 through 2021, with fluctuations within a narrow range. The gradual reduction in leverage indicates a possible strategic move towards lower reliance on debt or improved capital structure over time, which typically implies reduced financial risk.

Return on Equity (ROE)

The ROE figures, available starting March 31, 2019, exhibit a pattern similar to ROA but at higher percentages, reflecting the impact of leverage on equity returns. ROE reached a peak close to 16% in late 2019 and again in parts of 2021 with a high of 16.01% in September 2021. After this peak, a downward trend is observed beginning early 2022, with ROE falling to a low of 7.86% by September 2022. Some recovery occurs through mid-2023, with ROE increasing to 10.41% by June 2023. The decline and subsequent partial recovery in ROE follow the trends observed in profitability and leverage, indicating that overall shareholder returns have been affected by both operational performance and capital structure changes.

The quarterly financial data exhibits several notable trends across key performance indicators over the observed periods.

Net Profit Margin

The metric shows a consistent presence from March 31, 2019 onwards. Initially, the margin maintained a fairly stable level around 23-24%, with a gradual upward trend observed towards the end of 2020 and into 2021, peaking above 30% in September and December 2021. After this peak, the margin shows a declining trajectory throughout 2022, reaching the lowest point of approximately 20.1% in March 2023, followed by a slight recovery to nearly 24.9% by June 30, 2023. This pattern suggests a period of improving profitability followed by some contraction and partial rebound in more recent quarters.

Asset Turnover

This ratio starts being reported from March 31, 2019 and generally depicts a slow decrease over the majority of the periods. From an initial ratio of around 0.42, the asset turnover declines down to a low of about 0.27 by March 31, 2023, indicating a gradual reduction in efficiency in using assets to generate revenue. A minor uptick is visible by June 30, 2023, rising to approximately 0.31. This decline over time may suggest increased asset base or lower sales generation relative to assets held.

Financial Leverage

Financial leverage data is available from the earliest period and shows a downward trend from 1.87 in March 31, 2018 to a lower range near 1.36-1.42 from 2022 through mid-2023. This decreasing leverage ratio implies a reduction in the relative use of debt financing or a more conservative capital structure over time, contributing to potentially lower financial risk.

Return on Equity (ROE)

Return on equity figures, available from March 31, 2019, show a peak in the early periods with a high around 15-16% in 2019 and 2020, followed by fluctuations but generally maintaining double-digit returns until mid-2021. Subsequently, a sustained decline occurs from 2021 onward, dropping sharply below 10% in 2022 and early 2023, to reach a low near 7.9% by December 31, 2022. A modest recovery to around 10.4% by June 30, 2023 is also noted. This downward trend signifies decreasing profitability relative to shareholder equity during recent periods.

The financial data reveals several notable trends over the observed quarters for the company.

Tax Burden

The tax burden ratio starts at 0.97 in March 2019 and generally declines over time, reaching a low point around 0.83-0.85 in 2021, before stabilizing near 0.84 in mid-2023. This suggests a gradual reduction in the effective tax rate impacting earnings.

Interest Burden

Interest burden remains consistently high at or near 1.0 through 2021, indicating minimal interest expense impact on earnings before taxes. A slight decrease is observed starting in early 2022, with values diminishing marginally to around 0.94-0.96 by mid-2023, implying a modest increase in interest expenses relative to earnings.

EBIT Margin

Earnings before interest and taxes (EBIT) margin exhibits a positive upward trend from 25.03% in early 2019 to peak near 35.94% in the last quarter of 2021. Following this peak, there is a notable decline through 2022, dropping to 24.6% by the first quarter of 2023, before recovering somewhat to approximately 30.84% by mid-2023. This pattern represents improving operational profitability until late 2021, followed by some contraction and partial recovery.

Asset Turnover

The asset turnover ratio displays a consistent downward trend throughout the period, falling from approximately 0.42 in early 2019 to around 0.27 in the first quarter of 2023. This decline indicates decreased efficiency in generating revenue from asset base over time, with a slight stabilization occurring towards mid-2023.

Financial Leverage

Financial leverage ratios start at 1.87 in early 2018 and generally trend downward until stabilizing around 1.36-1.42 during 2022 and the first half of 2023. This trend suggests a gradual reduction in reliance on debt financing or a stronger equity base relative to liabilities over time.

Return on Equity (ROE)

The return on equity shows a peak around 16% in late 2021 after fluctuating in the mid-teens from 2019 through 2021. Subsequently, ROE declines sharply to a low near 7.86% in early 2023 before recovering modestly to approximately 10.41% by mid-2023. This trajectory suggests a decline in overall efficiency in generating shareholder returns after 2021, with some recovery commencing in 2023.

Overall, the company experienced improved profitability margins up to late 2021 accompanied by decreasing asset efficiency. Post-2021, profitability and returns weakened substantially, while tax and interest burdens remained relatively stable. Financial leverage decreased steadily over time, implying cautious balance sheet management. The recent partial recovery in EBIT margin and ROE may indicate stabilization following earlier declines.

Net Profit Margin

The net profit margin data begins to be available from March 31, 2018. Starting at 24.17%, the margin remains relatively stable with minor fluctuations through the end of 2019, maintaining levels around 23-24%. A noticeable upward trend occurs during 2020 and 2021, where the margin rises steadily, reaching a peak of 30.66% in September 2021. Following this peak, there is a decline observed into 2022, with margins dropping to a low of 20.1% in December 2022. The first two quarters of 2023 show a modest recovery, with margins increasing back to 24.87% by June 30, 2023.

Asset Turnover

Asset turnover ratios are available from March 31, 2018 onward. The ratio starts at 0.42 and shows a general downward trend over the period analyzed. There is a gradual decline from 2018 through 2020, with a dip to 0.29 in December 2022, which is the lowest point observed. A slight recovery happens in early 2023 with the ratio rising to 0.31 by June 30, 2023. This decreasing trend indicates a reduction in the efficiency with which the company utilizes its assets to generate revenue over the years.

Return on Assets (ROA)

Return on assets begins data reporting from March 31, 2018 at 10.17%. The ROA follows a pattern similar to net profit margin with initial stability and slight decline through 2019, falling to 7.57% by December 2019. Subsequently, ROA improves during 2020 and 2021, peaking at 11.06% in September 2021. After this peak, a decline is again noted through 2022, hitting the lowest point of 5.53% in September 2022. Early 2023 reflects partial recovery with ROA improving to 7.59% by June 30, 2023.

The financial data reveals several important trends in the company's profitability and efficiency metrics over the examined periods.

Tax Burden

The tax burden ratio, available from the first quarter of 2019 onward, exhibits a gradual decline from 0.97 in Q1 2019 to a low around 0.84-0.85 in early 2023. This downward trend suggests a reduction in the effective tax rate or improved tax efficiency over time.

Interest Burden

The interest burden ratio remains very stable and close to 1.00 throughout most periods, indicating that interest expenses have minimal impact on earnings before taxes. There is a slight decline in the last few observed quarters, dropping to around 0.94-0.96, which could suggest a marginal increase in interest expenses or debt levels recently.

EBIT Margin

The EBIT margin demonstrates a general upward trend from early 2019 to late 2021, increasing from around 25% to a peak near 36%. This indicates improved operating profitability during this period. However, starting in 2022, there is a noticeable decline reaching approximately 24.6% by Q1 2023, followed by a rebound to about 30.8% in mid-2023. This pattern may reflect challenges faced in 2022 with some recovery thereafter.

Asset Turnover

Asset turnover shows a gradual decline over the entire time frame, decreasing from about 0.42 in early 2019 to approximately 0.30 by mid-2023. This suggests a reduction in the efficiency with which the company utilizes its assets to generate revenue, possibly due to asset base growth outpacing revenue growth.

Return on Assets (ROA)

ROA follows a pattern broadly aligned with EBIT margin and asset turnover. From early 2019 through 2021, it generally increased, peaking at around 11%. Subsequently, ROA declined sharply during 2022 to lows near 5.5% but shows signs of recovery in 2023 reaching approximately 7.6%. This indicates that overall profitability relative to asset base weakened in 2022, potentially due to operational or market conditions, with some improvement in the most recent quarters.

In summary, the company experienced improvements in profitability margins and returns on assets up to late 2021, accompanied by a gradual decrease in asset utilization efficiency. The year 2022 marked a period of diminished profitability and returns, potentially reflecting external pressures or internal challenges, followed by partial recovery in 2023. Tax efficiency has improved steadily, while interest burdens remain low but slightly increasing recently.

The financial data reveals several notable trends in profitability and operational efficiency over the examined periods. The tax burden ratio, starting from the first available quarter in March 31, 2019, shows a gradual decline from 0.97 to a low of 0.83 in June 30, 2021, indicating a decreasing proportion of earnings paid in taxes. This ratio then stabilizes around 0.85 to 0.87 through subsequent quarters, suggesting a consistent tax environment or effective tax management.

The interest burden ratio remains consistently high, mostly at 1.00 from March 31, 2019 up until December 31, 2021, implying negligible interest expenses relative to earnings before interest and taxes during this period. However, a slight decreasing trend emerges after that, dropping to 0.94 by December 31, 2022 and modestly recovering to 0.96 by June 30, 2023. This change could reflect increased interest costs or altered financing strategies in more recent periods.

Examining profitability margins, the EBIT margin displays a rising trend from 25.03% in March 31, 2019 to a peak of 35.94% in March 31, 2022, indicating improved operational profitability. Post-peak, the margin declines notably to 24.60% by March 31, 2023 but rebounds slightly to 30.84% in June 30, 2023, signaling some recovery in operating efficiency.

The net profit margin aligns closely with the EBIT margin movements, beginning at 24.17% in March 31, 2019 and climbing to 30.66% in March 31, 2022, before experiencing a reduction to 20.10% in March 31, 2023. The margin then improves marginally to 24.87% by June 30, 2023. This pattern suggests that despite fluctuations, the company maintains relatively strong profitability after accounting for taxes and interest, though the recent declines highlight potential challenges affecting net income generation.

Overall, the data reflects a period of improving operational profitability and tax efficiency until early 2022, followed by increased financial costs and pressure on profit margins in 2022 and early 2023, with tentative signs of stabilization emerging in mid-2023.