Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Adobe Inc., profitability ratios
Based on: 10-K (reporting date: 2025-11-28), 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27).
The profitability metrics demonstrate a mixed performance over the observed period. While gross profit margin generally improved, operating and net profit margins experienced fluctuations. Return on equity and return on assets both showed significant increases in the most recent periods.
- Gross Profit Margin
- The gross profit margin exhibited an overall upward trend, increasing from 86.62% in 2020 to 89.27% in 2025. There was a slight dip from 88.18% in 2021 to 87.70% in 2022, but the margin recovered and continued to climb in subsequent years, reaching its highest point in 2025.
- Operating Profit Margin
- The operating profit margin initially increased from 32.93% in 2020 to 36.76% in 2021. However, it then declined to 34.64% in 2022 and 34.26% in 2023 before falling to 31.35% in 2024. A substantial recovery was observed in 2025, with the margin rising to 36.63%.
- Net Profit Margin
- The net profit margin experienced a notable decrease from 40.88% in 2020 to 30.55% in 2021, and continued to decline to 27.01% in 2022. A modest increase to 27.97% occurred in 2023, followed by a further decrease to 25.85% in 2024. The metric showed improvement in 2025, reaching 30.00%.
- Return on Equity (ROE)
- Return on equity decreased from 39.66% in 2020 to 32.59% in 2021, then showed some recovery to 33.85% in 2022 and 32.86% in 2023. A significant increase was observed in 2024, rising to 39.42%, and this trend continued strongly in 2025, with ROE reaching 61.34%.
- Return on Assets (ROA)
- Return on assets followed a similar pattern to ROE, declining from 21.66% in 2020 to 17.70% in 2021, and remaining relatively stable around 17-18% through 2023. A substantial increase was observed in 2024 (18.39%) and even more pronounced in 2025, reaching 24.17%.
The increases in both ROE and ROA in the later years suggest improved efficiency in utilizing equity and assets to generate profits. The divergence between the gross profit margin trend and the operating/net profit margin trends suggests potential changes in operating expenses or other factors impacting profitability below the gross profit level.
Return on Sales
Return on Investment
Gross Profit Margin
Adobe Inc., gross profit margin calculation, comparison to benchmarks
| Nov 28, 2025 | Nov 29, 2024 | Dec 1, 2023 | Dec 2, 2022 | Dec 3, 2021 | Nov 27, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Gross profit | 21,218) | 19,147) | 17,055) | 15,441) | 13,920) | 11,146) | |
| Revenue | 23,769) | 21,505) | 19,409) | 17,606) | 15,785) | 12,868) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 89.27% | 89.04% | 87.87% | 87.70% | 88.18% | 86.62% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Accenture PLC | 31.91% | 32.61% | 32.34% | 31.99% | 32.38% | 31.53% | |
| AppLovin Corp. | — | 75.22% | 67.74% | 55.41% | 64.62% | — | |
| Cadence Design Systems Inc. | — | 86.05% | 89.36% | 89.57% | 89.73% | 88.61% | |
| CrowdStrike Holdings Inc. | 74.92% | 75.27% | 73.17% | 73.60% | 73.75% | 70.58% | |
| Datadog Inc. | — | 80.79% | 80.74% | 79.30% | 77.23% | 78.43% | |
| International Business Machines Corp. | — | 56.65% | 55.45% | 54.00% | 54.90% | 48.32% | |
| Intuit Inc. | 79.57% | 78.72% | 78.13% | 81.09% | 82.53% | 82.05% | |
| Microsoft Corp. | 68.82% | 69.76% | 68.92% | 68.40% | 68.93% | 67.78% | |
| Oracle Corp. | 70.51% | 71.41% | 72.85% | 79.08% | 80.59% | 79.68% | |
| Palantir Technologies Inc. | — | 80.25% | 80.62% | 78.56% | 77.99% | 67.74% | |
| Palo Alto Networks Inc. | 73.41% | 74.35% | 72.29% | 68.76% | 70.05% | 70.68% | |
| Salesforce Inc. | 77.19% | 75.50% | 73.34% | 73.48% | 74.41% | 75.23% | |
| ServiceNow Inc. | — | 79.18% | 78.59% | 78.29% | 77.05% | 78.16% | |
| Synopsys Inc. | 76.98% | 79.68% | 79.08% | 79.07% | 79.50% | 78.44% | |
| Workday Inc. | 75.50% | 75.60% | 72.41% | 72.21% | 72.25% | 70.63% | |
Based on: 10-K (reporting date: 2025-11-28), 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27).
1 2025 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenue
= 100 × 21,218 ÷ 23,769 = 89.27%
2 Click competitor name to see calculations.
The gross profit margin demonstrates a generally positive trend over the observed period. Gross profit consistently increased in absolute terms, rising from US$11,146 million in 2020 to US$21,218 million in 2025. Revenue also exhibited consistent growth, moving from US$12,868 million in 2020 to US$23,769 million in 2025.
- Gross Profit Margin Trend
- The gross profit margin began at 86.62% in 2020 and increased to 88.18% in 2021, representing the largest single-year increase in the observed period. A slight decrease to 87.70% was noted in 2022. The margin then stabilized, increasing to 87.87% in 2023 before continuing its upward trajectory, reaching 89.04% in 2024 and 89.27% in 2025. This indicates improving efficiency in managing the cost of goods sold relative to revenue.
The consistent growth in both gross profit and revenue, coupled with the increasing gross profit margin, suggests effective pricing strategies and/or cost management practices. The relatively small fluctuations in the gross profit margin indicate a stable business model. The latest reported margin of 89.27% in 2025 represents the highest value within the analyzed timeframe.
- Year-over-Year Changes
- The most significant year-over-year increase in gross profit margin occurred between 2020 and 2021, with a rise of 1.56 percentage points. Subsequent annual changes were more modest, generally ranging between 0.1% and 0.3% except for the decrease between 2021 and 2022 (-0.48 percentage points). The period from 2024 to 2025 showed a 0.23 percentage point increase.
Overall, the gross profit margin demonstrates a positive and stable trend, indicating a healthy financial performance and efficient operations. The continued growth in both gross profit and revenue reinforces this assessment.
Operating Profit Margin
Adobe Inc., operating profit margin calculation, comparison to benchmarks
| Nov 28, 2025 | Nov 29, 2024 | Dec 1, 2023 | Dec 2, 2022 | Dec 3, 2021 | Nov 27, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Operating income | 8,706) | 6,741) | 6,650) | 6,098) | 5,802) | 4,237) | |
| Revenue | 23,769) | 21,505) | 19,409) | 17,606) | 15,785) | 12,868) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 36.63% | 31.35% | 34.26% | 34.64% | 36.76% | 32.93% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Accenture PLC | 14.68% | 14.79% | 13.74% | 15.21% | 15.08% | 14.69% | |
| AppLovin Corp. | — | 39.78% | 19.74% | -1.70% | 5.37% | — | |
| Cadence Design Systems Inc. | — | 29.10% | 30.59% | 30.15% | 26.07% | 24.06% | |
| CrowdStrike Holdings Inc. | -3.05% | -0.07% | -8.48% | -9.82% | -10.58% | -30.34% | |
| Datadog Inc. | — | 2.02% | -1.57% | -3.50% | -1.86% | -2.28% | |
| International Business Machines Corp. | — | 14.95% | 15.17% | 13.50% | 11.97% | 9.22% | |
| Intuit Inc. | 26.14% | 22.29% | 21.86% | 20.20% | 25.95% | 28.34% | |
| Microsoft Corp. | 45.62% | 44.64% | 41.77% | 42.06% | 41.59% | 37.03% | |
| Oracle Corp. | 30.80% | 28.99% | 26.21% | 25.74% | 37.58% | 35.57% | |
| Palantir Technologies Inc. | — | 10.83% | 5.39% | -8.46% | -26.66% | -107.41% | |
| Palo Alto Networks Inc. | 13.48% | 8.52% | 5.62% | -3.43% | -7.15% | -5.25% | |
| Salesforce Inc. | 19.01% | 14.38% | 3.29% | 2.07% | 2.14% | 1.74% | |
| ServiceNow Inc. | — | 12.42% | 8.49% | 4.90% | 4.36% | 4.40% | |
| Synopsys Inc. | 12.97% | 22.13% | 21.72% | 22.87% | 17.48% | 16.83% | |
| Workday Inc. | 4.91% | 2.52% | -3.57% | -2.27% | -5.76% | -13.85% | |
| Operating Profit Margin, Sector | |||||||
| Software & Services | — | 30.31% | 27.20% | 27.08% | 27.93% | — | |
| Operating Profit Margin, Industry | |||||||
| Information Technology | — | 26.60% | 24.42% | 26.32% | 26.64% | — | |
Based on: 10-K (reporting date: 2025-11-28), 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27).
1 2025 Calculation
Operating profit margin = 100 × Operating income ÷ Revenue
= 100 × 8,706 ÷ 23,769 = 36.63%
2 Click competitor name to see calculations.
The operating profit margin exhibited fluctuations over the observed period. Initially, an increasing trend was apparent, followed by a period of relative stability and then a notable increase in the most recent years.
- Overall Trend
- From November 2020 to December 2021, the operating profit margin increased from 32.93% to 36.76%, indicating improved operational efficiency or pricing power. This positive trend leveled off in the following two years, with the margin decreasing slightly to 34.64% in December 2022 and further to 34.26% in December 2023. However, a significant increase is observed in November 2024, dropping to 31.35% before rebounding strongly to 36.63% in November 2025.
- Relationship to Operating Income and Revenue
- The operating profit margin’s movements correlate with changes in both operating income and revenue. The increase from 2020 to 2021 was supported by a substantial rise in operating income, exceeding the growth in revenue. While both operating income and revenue continued to grow in subsequent years, the operating profit margin experienced a slight decline, suggesting that costs may have increased at a faster rate than revenue. The recent increase in margin in 2025 is associated with a disproportionately larger increase in operating income compared to revenue growth.
- Recent Performance
- The operating profit margin experienced a dip in November 2024, potentially due to increased operating expenses or a shift in the revenue mix towards lower-margin products or services. However, the substantial recovery in November 2025 suggests successful cost management initiatives or a favorable change in the revenue composition. The margin in November 2025 reached its highest point in the observed period.
In summary, the operating profit margin demonstrates a dynamic pattern, influenced by the interplay between revenue growth, operating income, and cost control. The recent improvement in the margin is a positive indicator of the company’s operational performance.
Net Profit Margin
Adobe Inc., net profit margin calculation, comparison to benchmarks
| Nov 28, 2025 | Nov 29, 2024 | Dec 1, 2023 | Dec 2, 2022 | Dec 3, 2021 | Nov 27, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 7,130) | 5,560) | 5,428) | 4,756) | 4,822) | 5,260) | |
| Revenue | 23,769) | 21,505) | 19,409) | 17,606) | 15,785) | 12,868) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 30.00% | 25.85% | 27.97% | 27.01% | 30.55% | 40.88% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Accenture PLC | 11.02% | 11.19% | 10.72% | 11.17% | 11.69% | 11.52% | |
| AppLovin Corp. | — | 33.55% | 10.87% | -6.84% | 1.27% | — | |
| Cadence Design Systems Inc. | — | 22.74% | 25.46% | 23.84% | 23.29% | 22.02% | |
| CrowdStrike Holdings Inc. | -0.49% | 2.92% | -8.18% | -16.18% | -10.59% | -29.45% | |
| Datadog Inc. | — | 6.85% | 2.28% | -2.99% | -2.02% | -4.07% | |
| International Business Machines Corp. | — | 9.60% | 12.13% | 2.71% | 10.01% | 7.59% | |
| Intuit Inc. | 20.55% | 18.19% | 16.59% | 16.23% | 21.41% | 23.78% | |
| Microsoft Corp. | 36.15% | 35.96% | 34.15% | 36.69% | 36.45% | 30.96% | |
| Oracle Corp. | 21.68% | 19.76% | 17.02% | 15.83% | 33.96% | 25.94% | |
| Palantir Technologies Inc. | — | 16.13% | 9.43% | -19.61% | -33.75% | -106.75% | |
| Palo Alto Networks Inc. | 12.30% | 32.11% | 6.38% | -4.85% | -11.72% | -7.83% | |
| Salesforce Inc. | 16.35% | 11.87% | 0.66% | 5.45% | 19.16% | 0.74% | |
| ServiceNow Inc. | — | 12.97% | 19.30% | 4.49% | 3.90% | 2.62% | |
| Synopsys Inc. | 18.89% | 36.94% | 21.05% | 19.38% | 18.02% | 18.03% | |
| Workday Inc. | 6.23% | 19.02% | -5.90% | 0.57% | -6.54% | -13.25% | |
| Net Profit Margin, Sector | |||||||
| Software & Services | — | 24.71% | 21.78% | 21.43% | 25.04% | — | |
| Net Profit Margin, Industry | |||||||
| Information Technology | — | 20.64% | 20.33% | 22.35% | 23.54% | — | |
Based on: 10-K (reporting date: 2025-11-28), 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27).
1 2025 Calculation
Net profit margin = 100 × Net income ÷ Revenue
= 100 × 7,130 ÷ 23,769 = 30.00%
2 Click competitor name to see calculations.
The net profit margin exhibited fluctuations over the observed period. Initially strong, the metric experienced a decline before stabilizing and subsequently increasing.
- Overall Trend
- The net profit margin began at 40.88% in 2020, representing a high level of profitability. A consistent decline followed, reaching a low of 27.01% in 2022. From 2022 through 2024, the margin remained relatively stable, with a slight decrease to 25.85% in 2024. A notable increase is then observed, with the margin rising to 30.00% in 2025.
- Initial Decline (2020-2022)
- The period between 2020 and 2022 saw a substantial decrease in net profit margin. This coincided with increasing revenue, suggesting that while sales grew, profitability did not keep pace. The decline of approximately 13.87 percentage points over these three years warrants further investigation into potential factors such as increased cost of goods sold, operating expenses, or changes in pricing strategy.
- Stabilization and Recovery (2022-2025)
- Following the decline, the net profit margin stabilized between 2022 and 2024, indicating a potential leveling off of cost pressures or a successful implementation of efficiency measures. The subsequent increase to 30.00% in 2025 suggests a positive shift in the company’s ability to convert revenue into profit. This recovery could be attributed to factors like improved cost management, successful product launches, or favorable market conditions.
- Relationship to Revenue
- Revenue consistently increased throughout the period. However, the net profit margin did not always move in tandem with revenue growth. The divergence between revenue and net profit margin during the 2020-2022 period highlights the importance of analyzing profitability metrics alongside revenue figures to gain a comprehensive understanding of financial performance.
The recent upward trend in net profit margin is encouraging, but continued monitoring is necessary to determine if this represents a sustainable improvement or a temporary fluctuation.
Return on Equity (ROE)
Adobe Inc., ROE calculation, comparison to benchmarks
| Nov 28, 2025 | Nov 29, 2024 | Dec 1, 2023 | Dec 2, 2022 | Dec 3, 2021 | Nov 27, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 7,130) | 5,560) | 5,428) | 4,756) | 4,822) | 5,260) | |
| Stockholders’ equity | 11,623) | 14,105) | 16,518) | 14,051) | 14,797) | 13,264) | |
| Profitability Ratio | |||||||
| ROE1 | 61.34% | 39.42% | 32.86% | 33.85% | 32.59% | 39.66% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Accenture PLC | 24.61% | 25.68% | 26.75% | 31.11% | 30.25% | 30.05% | |
| AppLovin Corp. | — | 144.96% | 28.39% | -10.13% | 1.66% | — | |
| Cadence Design Systems Inc. | — | 22.58% | 30.58% | 30.93% | 25.39% | 23.69% | |
| CrowdStrike Holdings Inc. | -0.59% | 3.88% | -12.52% | -22.89% | -10.64% | -19.10% | |
| Datadog Inc. | — | 6.77% | 2.40% | -3.56% | -1.99% | -2.56% | |
| International Business Machines Corp. | — | 22.06% | 33.29% | 7.47% | 30.38% | 27.14% | |
| Intuit Inc. | 19.63% | 16.07% | 13.81% | 12.57% | 20.89% | 35.76% | |
| Microsoft Corp. | 29.65% | 32.83% | 35.09% | 43.68% | 43.15% | 37.43% | |
| Oracle Corp. | 60.84% | 120.26% | 792.45% | — | 262.43% | 83.94% | |
| Palantir Technologies Inc. | — | 9.24% | 6.04% | -14.57% | -22.71% | -76.61% | |
| Palo Alto Networks Inc. | 14.49% | 49.86% | 25.15% | -127.14% | -78.63% | -24.23% | |
| Salesforce Inc. | 10.13% | 6.93% | 0.36% | 2.48% | 9.81% | 0.37% | |
| ServiceNow Inc. | — | 14.83% | 22.69% | 6.46% | 6.22% | 4.18% | |
| Synopsys Inc. | 4.70% | 25.17% | 20.01% | 17.85% | 14.31% | 13.54% | |
| Workday Inc. | 5.82% | 17.09% | -6.57% | 0.65% | -8.62% | -19.33% | |
| ROE, Sector | |||||||
| Software & Services | — | 28.69% | 28.33% | 30.61% | 35.77% | — | |
| ROE, Industry | |||||||
| Information Technology | — | 29.36% | 31.85% | 38.86% | 42.21% | — | |
Based on: 10-K (reporting date: 2025-11-28), 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27).
1 2025 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 7,130 ÷ 11,623 = 61.34%
2 Click competitor name to see calculations.
The Return on Equity (ROE) exhibited fluctuating performance over the observed period. Initial values demonstrated a strong profitability relative to equity, followed by a period of relative stability, and culminating in a significant increase in the most recent years.
- Overall Trend
- From 2020 to 2023, ROE experienced a decline from 39.66% to 32.86%. However, a notable reversal occurred in 2024, with ROE increasing to 39.42%. This upward trajectory continued into 2025, reaching a high of 61.34%.
- Net Income Influence
- Net income generally increased over the period, with a slight dip between 2020 and 2021, and again between 2021 and 2022. The most substantial increase in net income occurred between 2024 and 2025, rising from US$5,560 million to US$7,130 million. This increase aligns with the significant rise in ROE observed during the same timeframe, suggesting a strong correlation between net income growth and shareholder returns.
- Stockholders’ Equity Influence
- Stockholders’ equity demonstrated an initial increase from 2020 to 2021, followed by a decrease in 2022. A subsequent increase occurred in 2023, but equity then decreased in both 2024 and 2025. The decrease in equity in 2025, coupled with the substantial increase in net income, is the primary driver of the exceptionally high ROE value for that year. A shrinking equity base amplifies the impact of net income on the ROE calculation.
- Comparative Analysis
- The ROE in 2020 and 2024 were relatively similar, at 39.66% and 39.42% respectively. However, the underlying components driving these values differed. In 2020, the ROE was achieved with a higher equity base, while in 2024, it was achieved with a lower equity base and a slightly higher net income. The substantial increase in ROE in 2025 is largely attributable to the combination of increased net income and decreased stockholders’ equity.
In summary, the observed ROE trend reflects a dynamic interplay between net income and stockholders’ equity. While net income generally increased, fluctuations in equity significantly impacted the ROE, culminating in a substantial increase in the most recent period.
Return on Assets (ROA)
Adobe Inc., ROA calculation, comparison to benchmarks
| Nov 28, 2025 | Nov 29, 2024 | Dec 1, 2023 | Dec 2, 2022 | Dec 3, 2021 | Nov 27, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 7,130) | 5,560) | 5,428) | 4,756) | 4,822) | 5,260) | |
| Total assets | 29,496) | 30,230) | 29,779) | 27,165) | 27,241) | 24,284) | |
| Profitability Ratio | |||||||
| ROA1 | 24.17% | 18.39% | 18.23% | 17.51% | 17.70% | 21.66% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Accenture PLC | 11.74% | 12.99% | 13.41% | 14.55% | 13.68% | 13.78% | |
| AppLovin Corp. | — | 26.92% | 6.66% | -3.30% | 0.58% | — | |
| Cadence Design Systems Inc. | — | 11.76% | 18.36% | 16.53% | 15.87% | 14.95% | |
| CrowdStrike Holdings Inc. | -0.22% | 1.34% | -3.65% | -6.49% | -3.39% | -10.09% | |
| Datadog Inc. | — | 3.18% | 1.23% | -1.67% | -0.87% | -1.30% | |
| International Business Machines Corp. | — | 4.39% | 5.55% | 1.29% | 4.35% | 3.58% | |
| Intuit Inc. | 10.47% | 9.22% | 8.58% | 7.45% | 13.29% | 16.70% | |
| Microsoft Corp. | 16.45% | 17.21% | 17.56% | 19.94% | 18.36% | 14.70% | |
| Oracle Corp. | 7.39% | 7.42% | 6.33% | 6.15% | 10.48% | 8.78% | |
| Palantir Technologies Inc. | — | 7.29% | 4.64% | -10.80% | -16.02% | -43.35% | |
| Palo Alto Networks Inc. | 4.81% | 12.89% | 3.03% | -2.18% | -4.87% | -2.95% | |
| Salesforce Inc. | 6.02% | 4.14% | 0.21% | 1.52% | 6.14% | 0.23% | |
| ServiceNow Inc. | — | 6.99% | 9.96% | 2.44% | 2.13% | 1.36% | |
| Synopsys Inc. | 2.76% | 17.31% | 11.90% | 10.45% | 8.66% | 8.27% | |
| Workday Inc. | 2.93% | 8.39% | -2.72% | 0.28% | -3.24% | -7.05% | |
| ROA, Sector | |||||||
| Software & Services | — | 12.19% | 11.12% | 11.25% | 12.14% | — | |
| ROA, Industry | |||||||
| Information Technology | — | 11.95% | 12.47% | 14.49% | 14.60% | — | |
Based on: 10-K (reporting date: 2025-11-28), 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27).
1 2025 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 7,130 ÷ 29,496 = 24.17%
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited fluctuations over the observed period. Initially, a decline in ROA is noted, followed by a period of stabilization and then a significant increase towards the end of the analyzed timeframe.
- Overall Trend
- The ROA decreased from 21.66% in 2020 to 17.70% in 2021, and continued to decline slightly to 17.51% in 2022. A modest recovery began in 2023, with the ROA reaching 18.23%, and continued into 2024 at 18.39%. A substantial increase is then observed in 2025, with the ROA rising to 24.17%.
- Initial Decline (2020-2022)
- The initial decrease in ROA from 2020 through 2022 occurred alongside relatively stable net income, while total assets increased. This suggests that the growth in assets did not generate a proportional increase in profitability during this period, leading to the decline in ROA. The increase in total assets outpaced the growth in net income.
- Stabilization and Growth (2023-2025)
- From 2023 to 2025, net income demonstrated positive growth, while total assets experienced more moderate increases. This shift in the relationship between net income and total assets contributed to the stabilization and subsequent increase in ROA. The significant jump in ROA in 2025 is largely attributable to a substantial increase in net income, coupled with a slight decrease in total assets.
- Net Income and ROA Correlation
- A strong positive correlation between net income and ROA is evident. As net income increased, ROA generally followed suit, and vice versa. This indicates that profitability is a primary driver of the observed ROA trends.
In summary, the ROA experienced a period of decline followed by a recovery and substantial growth. The changes in ROA appear closely linked to the relative growth rates of net income and total assets, with net income playing a particularly significant role in the most recent increase.