Applied Materials Inc. (NASDAQ:AMAT)

Total Asset Turnover

The reported total asset turnover ratio showed a gradual increase from 0.77 in 2019 to a peak of 0.96 in 2022, followed by a decline to 0.79 in 2024. The adjusted total asset turnover exhibited a similar trend, increasing steadily until 2022 when it reached 1.02, then declining to 0.85 by 2024. This pattern suggests improvement in asset utilization efficiency until 2022, with some reduction in effectiveness thereafter.

Current Ratio

The reported current ratio increased significantly from 2.3 in 2019 to 3.0 in 2020, then decreased to 2.16 in 2022 before rising again to 2.60 in 2023 and slightly falling to 2.51 in 2024. The adjusted current ratio reflected consistent behavior with slightly higher values across all years. Overall, the company maintained a healthy liquidity position, with the current ratio consistently above 2, indicating strong short-term financial stability.

Debt to Equity

The reported debt to equity ratio decreased steadily from 0.65 in 2019 to 0.33 in 2024, a trend mirrored by the adjusted ratio which fell from 0.82 to 0.39 over the same period. This downward trajectory indicates a progressive reduction in leverage and improved capital structure, suggesting a strategic shift towards lower reliance on debt financing.

Debt to Capital

The reported debt to capital ratio declined from 0.39 in 2019 to 0.25 in 2024, with the adjusted ratio showing a similar reduction from 0.45 to 0.28. This movement further confirms the reduction in leverage, signaling strengthening financial prudence and an enhanced balance sheet quality.

Financial Leverage

The reported financial leverage ratio decreased from 2.32 in 2019 to 1.81 in 2024, and the adjusted leverage showed a decline from 2.61 to 1.89. This consistent reduction implies lower use of debt relative to equity, contributing to potentially lower financial risk.

Net Profit Margin

The reported net profit margin increased from 18.52% in 2019 to 26.41% in 2024, with a slight dip observed in 2023 before recovering in 2024. The adjusted margin followed a comparable path, peaking at 26.39% in 2022 before falling to 24.25% by 2024. These figures indicate improved profitability over the period, though some volatility is present in the most recent years.

Return on Equity (ROE)

Reported ROE increased sharply from 32.94% in 2019 to a peak of 53.51% in 2022, then declined to 37.77% in 2024. Adjusted ROE showed a similar pattern, rising to 60.95% in 2022 before decreasing to 38.8% in 2024. The decline after 2022 suggests that while shareholder returns were exceptionally strong until that year, there has been a moderation in profitability efficiency more recently.

Return on Assets (ROA)

Reported ROA rose from 14.22% in 2019 to 24.41% in 2022, then declined to 20.86% in 2024. Adjusted ROA moved similarly, peaking at 26.83% in 2022 before falling to 20.58% by 2024. This indicates that asset utilization to generate earnings improved significantly over the first part of the period but has softened somewhat afterward.

Net revenue

The net revenue demonstrated a consistent upward trajectory throughout the observed periods. Starting at 14,608 million US dollars in 2019, revenue increased steadily each year, reaching 27,176 million US dollars in 2024. This growth reflects an overall positive revenue expansion of approximately 86% over the six-year span.

Total assets

Total assets expanded significantly over the period, increasing from 19,024 million US dollars in 2019 to 34,409 million US dollars in 2024. This represents an approximate growth of 81%, indicating substantial asset accumulation likely to support the expanding business operations.

Reported total asset turnover

The reported total asset turnover ratio remained stable in the initial years at 0.77 in both 2019 and 2020. It then improved notably to 0.89 in 2021 and peaked at 0.96 in 2022, before declining to 0.86 in 2023 and further to 0.79 in 2024. This indicates an initial improvement in the efficiency with which assets generated sales, followed by a gradual decrease in this efficiency in the latter years.

Adjusted total assets

Adjusted total assets followed a trend similar to total assets, rising from 17,439 million US dollars in 2019 to 32,016 million US dollars in 2024. The growth of about 83% suggests ongoing adjustments capturing more relevant asset values for operational assessment.

Adjusted total asset turnover

The adjusted total asset turnover ratio showed a pattern comparable to the reported turnover but with generally higher values. Beginning at 0.84 in 2019, it slightly decreased to 0.83 in 2020, then increased steadily to 0.95 in 2021 and reached its peak at 1.02 in 2022. Subsequently, it declined to 0.91 in 2023 and further to 0.85 in 2024. This pattern reflects changes in asset utilization efficiency when adjusted asset values are considered, highlighting improved efficiency up to 2022 followed by a decline in the subsequent periods.

Summary of trends

Overall, the data depicts strong growth in both revenues and asset base over the years, with the company investing significantly in assets to support business expansion. Asset turnover metrics indicate that efficiency in generating sales from assets improved until 2022 but has experienced a decline in the most recent years. The adjusted turnover ratios, being higher than the reported ones, suggest that the adjusted asset base may provide a more favorable view of asset utilization efficiency. The decline in turnover ratios post-2022 could imply challenges in maintaining asset productivity amid growth or shifts in operational dynamics.

Current Assets

Current assets showed a consistent upward trend from 2019 through 2024. Beginning at $10,206 million in 2019, the value increased steadily each year, reaching $21,220 million by 2024, nearly doubling over the six-year period. This reflects a continuous growth in liquid and short-term assets available to the company.

Current Liabilities

Current liabilities also exhibited an overall increasing pattern, albeit with some fluctuations. From $4,447 million in 2019, liabilities remained relatively stable in 2020, then saw a significant rise in 2021 to $6,344 million. This elevated level continued through 2024, culminating at $8,468 million. The increase in liabilities indicates higher short-term obligations over time.

Reported Current Ratio

The reported current ratio, which measures the ability to cover short-term obligations with current assets, fluctuated over the period. It peaked at 3.0 in 2020, suggesting strong short-term liquidity, then declined to 2.16 in 2022. Afterwards, it recovered somewhat to 2.6 in 2023 but decreased slightly to 2.51 in 2024. Despite fluctuations, the ratio remained above 2 throughout, indicating a generally comfortable liquidity position.

Adjusted Current Assets

Adjusted current assets followed the same upward trajectory as reported current assets, starting at $10,236 million in 2019 and reaching $21,220 million in 2024. The adjustment appears minimal when compared to raw values, indicating minor modifications or reclassifications in asset calculation.

Adjusted Current Liabilities

Adjusted current liabilities increased steadily from $4,251 million in 2019 to $8,104 million in 2024. The trend is consistent with reported liabilities but slightly lower in absolute terms, reflecting adjustments such as excluding certain liabilities for analytical purposes.

Adjusted Current Ratio

The adjusted current ratio mirrored the reported current ratio trend but consistently showed slightly higher values. It peaked at 3.15 in 2020, declined to 2.25 in 2022, then rose to 2.72 in 2023, and slightly decreased to 2.62 in 2024. This trend indicates the company’s solid liquidity position, with adjusted figures suggesting marginally improved short-term financial strength after adjustments.

The analyzed financial data exhibits several key trends in the capital structure and leverage of the entity over a six-year period.

Total Debt

Total debt has shown a gradual increase, rising from $5,313 million in 2019 to $6,259 million in 2024. This represents an approximate growth of 17.7%, indicating a moderate expansion in the company’s outstanding borrowings.

Stockholders’ Equity

Stockholders’ equity has increased significantly, from $8,214 million in 2019 to $19,001 million in 2024. This nearly 131% increase suggests a substantial build-up of net assets, reflecting retained earnings growth, capital injections, or both.

Reported Debt to Equity Ratio

The reported debt-to-equity ratio has consistently decreased from 0.65 in 2019 to 0.33 in 2024. This declining ratio indicates a strengthening equity base relative to debt, signaling reduced financial leverage and potentially lower financial risk.

Adjusted Total Debt

Adjusted total debt follows a similar upward trend as total debt, increasing from $5,464 million to $6,605 million over the same period. The adjustment suggests recognition of additional liabilities or refinements in debt classification but does not significantly alter the upward trend.

Adjusted Stockholders’ Equity

Adjusted stockholders’ equity exhibits robust growth from $6,685 million in 2019 to $16,983 million in 2024. This increase, though lower than the unadjusted equity, still represents significant strengthening of the capital base.

Adjusted Debt to Equity Ratio

The adjusted debt-to-equity ratio shows a notable decline from 0.82 in 2019 to 0.39 in 2024, mirroring the trend observed in the reported ratio. This reflects an improving leverage position even after adjustments, indicative of enhanced financial stability.

Overall, the data reveals a trend of increasing debt levels accompanied by a far more significant increase in equity, resulting in reduced leverage ratios. Both reported and adjusted metrics consistently indicate a strengthening capital structure with lower proportional debt exposure, suggesting a conservative approach towards financing or successful retention of earnings contributing to equity growth.

Total Debt

The total debt demonstrates a gradual increase over the six-year period. Starting at $5,313 million in 2019, it rises steadily each year to reach $6,259 million by 2024. This represents an approximate 18% increase in total debt, indicating a moderate but consistent accumulation of liabilities.

Total Capital

Total capital follows a generally increasing trend with some fluctuations. Beginning at $13,527 million in 2019, it grows significantly to $25,260 million in 2024. Notably, a substantial jump occurs between 2022 and 2023, from $17,651 million to $22,012 million, continuing upward into 2024. Overall, total capital nearly doubles in this timeframe, suggesting expansion in the company's equity and debt financing.

Reported Debt to Capital Ratio

The reported debt to capital ratio shows a consistent decline from 0.39 in 2019 to 0.25 in 2024. This indicates that, relative to its total capital, the company's debt burden has decreased. The reduction from 0.39 to 0.25 suggests improved financial leverage, meaning the company relies less on debt financing and more on equity or other capital.

Adjusted Total Debt

The adjusted total debt exhibits a similar upward trend to total debt but at slightly higher levels. Starting at $5,464 million in 2019, it increases steadily to $6,605 million in 2024, aligning with an approximate 21% rise. This adjustment reflects possibly additional or reclassified liabilities but maintains the pattern of controlled growth in debt levels.

Adjusted Total Capital

Adjusted total capital starts at $12,149 million in 2019, increasing to $23,588 million by 2024. The increment is substantial and mirrors the pattern seen in total capital, with a notable growth spurt between 2022 and 2023. This trend signifies strengthened capital structure when considering the adjusted figures.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio declines from 0.45 in 2019 to 0.28 in 2024. Despite the incremental rise in adjusted debt, the larger increase in adjusted capital results in a lower leverage ratio. This improving ratio indicates enhanced financial stability and reduced risk exposure from a debt perspective over time.

Total Assets

Total assets demonstrated a consistent upward trend over the six-year period. Beginning at $19,024 million in 2019, the figure increased steadily each year, reaching $34,409 million by 2024. This represents a growth of approximately 81% over the timeframe, indicating expansion in the company's asset base.

Stockholders’ Equity

Stockholders’ equity similarly showed continuous growth from $8,214 million in 2019 to $19,001 million in 2024. The increase was not only steady but accelerated notably in the last two years, where equity rose from $12,194 million in 2022 to $19,001 million in 2024, an increase of around 56%. This suggests stronger capital retention or infusion, improving the equity position significantly.

Reported Financial Leverage

The reported financial leverage ratio, which measures total assets to equity, declined over the period. It started at 2.32 in 2019 and decreased to 1.81 by 2024. The declining ratio implies a reduction in reliance on debt or liabilities to finance assets, indicating an improvement in financial stability and less risk exposure.

Adjusted Total Assets

Adjusted total assets followed a pattern similar to total assets, increasing from $17,439 million in 2019 to $32,016 million in 2024. This represents a growth rate of about 84%, slightly higher than the unadjusted figure, suggesting some adjustments did not diminish the growth trajectory of asset valuation.

Adjusted Stockholders’ Equity

Adjusted equity increased consistently from $6,685 million in 2019 to $16,983 million in 2024. The growth rate over these years is approximately 154%, notable for being proportionally larger than that of total assets, which again signals strengthened equity capital after adjustments.

Adjusted Financial Leverage

Adjusted financial leverage showed a declining trend similar to the reported leverage. Beginning at 2.61 in 2019, it fell to 1.89 in 2024. The ratio decreased steadily, particularly between 2022 and 2024, reinforcing the indication of reduced financial risk by lowering dependency on liabilities relative to equity.

Net Income Trends

Over the six-year period, net income demonstrates a consistent upward trajectory. Starting at $2,706 million in 2019, it increased significantly to $7,177 million by 2024. This reflects a strong growth rate, particularly notable between 2020 and 2021, where net income rose sharply from $3,619 million to $5,888 million.

Net Revenue Trends

Net revenue also shows a steady increase throughout the given timeframe. Beginning at $14,608 million in 2019, revenue climbs to $27,176 million in 2024. The growth pace appears consistent year-over-year, with the most pronounced revenue increase recorded between 2020 and 2021.

Reported Net Profit Margin

The reported net profit margin generally trends upward, rising from 18.52% in 2019 to 26.41% in 2024. A notable increase is evidenced between 2020 and 2021, where the margin jumps from 21.04% to 25.53%. After 2021, the margin stabilizes with modest annual increases, indicating effective cost management or operational efficiencies despite rising revenue.

Adjusted Net Income

Adjusted net income mirrors the upward trend observed in net income but exhibits some fluctuations. Starting from $2,704 million in 2019, it peaks in 2022 at $6,805 million and subsequently declines slightly to $6,590 million in 2024. This decline in the last two years contrasts with the continuous growth reported in net income, suggesting certain adjustments impacting profitability in those years.

Adjusted Net Profit Margin

The adjusted net profit margin fluctuates more noticeably than the reported margin. It rises from 18.51% in 2019 to a high of 26.39% in 2022, indicating improved profitability on adjusted earnings basis. However, margins decline to 24.25% by 2024, which diverges from the reported margin trend. This reduction in adjusted margins in the last two years implies potential increased costs or one-time items excluded from reported figures.

Summary of Insights

The data indicates a robust financial performance with significant revenue and net income growth over six years. Reported profitability margins improve steadily, suggesting overall operational gains. Adjusted earnings, while generally positive, reveal some pressure in the most recent years, highlighting the importance of examining underlying adjustments for insights into expense or non-recurring charge impacts. The divergence between reported and adjusted margins in the latest periods is a key point for further investigation.

Net Income

Net income exhibited a consistent upward trend over the six-year period, increasing from $2,706 million in 2019 to $7,177 million in 2024. The most significant growth occurred between 2020 and 2021, where net income rose sharply by approximately 63%. The growth rate moderated somewhat in subsequent years but remained positive throughout.

Stockholders’ Equity

Stockholders’ equity increased steadily from $8,214 million in 2019 to $19,001 million in 2024. A notable acceleration in equity growth was observed between 2022 and 2023, with equity rising from $12,194 million to $16,349 million, indicative of substantial capital accumulation or retained earnings during that interval.

Reported Return on Equity (ROE)

The reported ROE showed a general upward movement from 32.94% in 2019 to a peak of 53.51% in 2022. However, after reaching this high point, it declined to 37.77% by 2024. This pattern suggests that while profitability relative to equity improved markedly through 2022, efficiency or profitability diminished somewhat in the latter years.

Adjusted Net Income

Adjusted net income followed a similar positive trajectory as reported net income, starting at $2,704 million in 2019 and rising to $6,590 million in 2024. The peak adjusted net income was recorded in 2022 at $6,805 million, followed by a decrease in 2023 before a slight increase in 2024. This fluctuation may indicate one-time adjustments or non-recurring items affecting net income in those years.

Adjusted Stockholders’ Equity

Adjusted stockholders’ equity rose steadily from $6,685 million in 2019 to $16,983 million in 2024. Mirroring the pattern in reported equity, a significant jump is visible between 2022 and 2023. The adjusted equity values are consistently lower than reported equity, reflecting possible adjustments in accounting or valuation methodologies.

Adjusted Return on Equity (ROE)

Adjusted ROE demonstrated strong growth from 40.45% in 2019 to a peak of 60.95% in 2022, followed by a decline to 38.8% in 2024. The trend closely parallels that of reported ROE, with the adjusted measure consistently higher, suggesting that exclusions or adjustments enhance indicated profitability. The decline after 2022 indicates reduced efficiency or profitability on an adjusted basis in the most recent periods.

The financial data reveals consistent growth in profitability and asset base over the analyzed periods, with some indicators showing signs of moderation in recent years.

Net Income

There is a clear upward trend in net income, rising from 2,706 million USD in 2019 to 7,177 million USD in 2024. The increase has been steady each year, reflecting strong earnings growth over the six-year span.

Total Assets

Total assets also show a consistent increase, growing from 19,024 million USD in 2019 to 34,409 million USD in 2024. This indicates ongoing expansion in the company's resource base, supporting its operational capacity and growth strategies.

Reported Return on Assets (ROA)

The reported ROA improved markedly from 14.22% in 2019 to a peak of 24.41% in 2022, suggesting more efficient use of assets in generating profits during this period. However, it declined slightly in subsequent years to 22.31% in 2023 and further to 20.86% in 2024, indicating a mild easing in asset profitability after reaching a high point.

Adjusted Net Income

Adjusted net income follows a similar upward trajectory as net income, increasing from 2,704 million USD in 2019 to 6,590 million USD in 2024. There is a noted decrease between 2022 and 2023, followed by stabilization, signaling some adjustments impacting earnings but overall sustained profitability.

Adjusted Total Assets

Adjusted total assets also rise consistently, from 17,439 million USD in 2019 to 32,016 million USD in 2024. The progression mirrors that of reported total assets, confirming growth in the company’s asset base even after adjustments.

Adjusted ROA

The adjusted ROA climbed from 15.51% in 2019 to a high of 26.83% in 2022, surpassing the reported ROA peak, indicating strong adjusted profitability during this period. Similar to the reported ROA, adjusted ROA decreased to 22.49% in 2023 and further to 20.58% in 2024, reinforcing the observation of a peak followed by a modest decline.

Overall, the data demonstrates significant growth in income and asset size with improving efficiency in asset utilization through 2022. The slight downturn in ROA metrics post-2022 suggests either increased asset levels were not fully leveraged for additional profit or there were margin pressures. Earnings remain robust notwithstanding these recent trends.