Applied Materials Inc. (NASDAQ:AMAT)

Total Asset Turnover

The reported total asset turnover showed an ascending trend from 0.77 in 2020 to a peak of 0.96 in 2022, followed by a decline to 0.78 by 2025. The adjusted total asset turnover mirrored this pattern but remained slightly higher, peaking at 1.02 in 2022 before decreasing to 0.81 in 2025. This indicates an initial improvement in asset utilization efficiency, with some diminution in later years.

Current Ratio

The reported current ratio declined from 3 in 2020 to a low of 2.16 in 2022, then increased gradually to 2.61 by 2025. The adjusted current ratio followed a similar trajectory but with slightly higher values, bottoming at 2.25 in 2022 and rising to 2.79 in 2025. This suggests a temporary compression in short-term liquidity followed by a stabilization and modest recovery.

Debt to Equity Ratio

Reported debt to equity ratio declined steadily from 0.52 in 2020 to 0.32 in 2025, indicating a consistent reduction in reliance on debt financing relative to equity. The adjusted ratio, which was higher initially at 0.63, decreased similarly to 0.36 by 2025, reinforcing the trend toward a stronger equity position and reduced financial risk.

Debt to Capital Ratio

A gradual decrease is evident in the reported debt to capital ratio, from 0.34 in 2020 to 0.24 in 2025. The adjusted figure shows a comparable decline from 0.39 to 0.26 in the same period, signifying a deliberate effort to lower overall debt levels within the capital structure.

Financial Leverage

The reported financial leverage remained steady at around 2.11 from 2020 through 2021, increased slightly to 2.19 in 2022, then dropped to 1.78 by 2025. Similarly, the adjusted leverage ratio hovered near 2.27 before declining to 1.78. This pattern reflects a move toward reducing leverage and potentially lowering financial risk over time.

Net Profit Margin

Reported net profit margin improved from 21.04% in 2020 to a peak of 26.41% in 2024 but dipped slightly to 24.67% in 2025. The adjusted margin started lower at 20.77% but showed a notable increase, reaching 29.46% in 2025. The adjusted figures suggest improvements in operating profitability, possibly due to operational efficiencies or favorable market conditions.

Return on Equity (ROE)

Reported ROE exhibited a strong upward trend from 34.21% in 2020 to a peak of 53.51% in 2022, followed by a decline to 34.28% in 2025. Adjusted ROE showed a similar pattern but with higher values, peaking at 60.95% in 2022 and ending at 42.39% in 2025. This indicates that the company achieved substantial profitability on shareholders’ equity but faced some contraction in later years, although remaining robust.

Return on Assets (ROA)

Reported ROA increased from 16.19% in 2020 to 24.41% in 2022, then decreased to 19.28% by 2025. The adjusted ROA was consistently higher, rising from 17.28% to 26.83% before settling at 23.83%. The trend suggests enhanced efficiency in asset utilization with some degree of moderation in the most recent periods.

Over the observed periods, net revenue demonstrates a consistent upward trend, increasing from US$17,202 million in 2020 to US$28,368 million in 2025. This indicates steady growth in the company's top-line performance across the years under review.

Total assets also experience growth, rising from US$22,353 million in 2020 to US$36,299 million in 2025. The increase suggests ongoing investment and expansion in asset base, which could support the company's revenue-generating activities.

Asset Turnover Ratios:

The reported total asset turnover ratio shows some variability over the periods. Starting at 0.77 in 2020, it improves to a peak of 0.96 in 2022, before declining gradually to 0.78 by 2025. This indicates that the efficiency with which the company uses its assets to generate revenue improved initially but then decreased in later years.

The adjusted total asset turnover ratio, which is based on adjusted total assets, follows a similar pattern. It increases from 0.83 in 2020 to a high of 1.02 in 2022, reflecting enhanced asset utilization efficiencies, then declines to 0.81 in 2025. Despite the decline, the adjusted turnover remains higher throughout than the reported turnover, suggesting the adjusted measure captures efficiency more favorably.

The divergence between reported and adjusted total assets shows that adjusted assets consistently register lower values than total assets, likely reflecting certain asset adjustments to better measure productive assets. The associated turnover ratios based on adjusted assets are correspondingly higher, indicating that excluding certain asset components results in a better assessment of operational efficiency.

Overall, the data suggest a phase of growth coupled with improving operational efficiency up to around 2022, followed by a moderate decline in asset turnover ratios despite continued asset and revenue growth. This may indicate diminishing marginal returns on asset investments or changes in business dynamics affecting asset productivity in recent years.

The analysis of the financial data over the examined periods reveals several key trends related to liquidity and working capital management.

Current Assets

Current assets showed an overall upward trend, increasing from $13,369 million in 2020 to a peak of $21,220 million in 2024, followed by a slight decline to $20,881 million in 2025. This indicates a general growth in liquid and near-liquid assets available to cover short-term obligations.

Current Liabilities

Current liabilities also increased over time, rising from $4,459 million in 2020 to $8,468 million in 2024, before decreasing slightly to $7,999 million in 2025. This trend suggests increased short-term obligations, but the reduction in the most recent year may indicate improved short-term debt management or payments.

Reported Current Ratio

The reported current ratio started at a strong level of 3.00 in 2020 but decreased to its lowest point of 2.16 in 2022, reflecting a relative tightening of liquidity. However, it rebounded to 2.6 in 2023 and maintained around 2.5 to 2.6 thereafter, indicating stabilization in the company's ability to cover short-term liabilities.

Adjusted Current Assets and Liabilities

Adjusted current assets followed a pattern similar to reported current assets, peaking in 2024 and slightly declining in 2025. Adjusted current liabilities similarly increased over the years but showed a decrease in the latest period. These adjustments likely exclude certain non-liquid components, providing a refined view of liquidity.

Adjusted Current Ratio

The adjusted current ratio started higher than the reported metric at 3.15 in 2020, but mirrored the downward trend to 2.25 by 2022. Subsequently, it increased again to 2.79 by 2025, suggesting a recovery and strengthening of liquid asset coverage over short-term obligations when adjusted for specific accounting factors.

Overall, the data presents a narrative of expanding financial scale with increasing assets and liabilities, accompanied by transient pressure on liquidity around 2022. Post-2022, liquidity ratios improved and stabilized, indicating effective management in maintaining a comfortable buffer for short-term obligations despite growth in both assets and liabilities.

The annual financial data reveals noteworthy trends in the company's capital structure, particularly regarding debt levels and shareholders' equity over the six-year period.

Total Debt

Total debt has shown a gradual increase from US$5,448 million in 2020 to US$6,555 million in 2025. The upward trend is consistent year-over-year, indicating a steady accumulation of debt obligations.

Stockholders’ Equity

Stockholders’ equity has experienced significant growth, rising from US$10,578 million in 2020 to US$20,415 million in 2025. There was a notable acceleration in equity between 2022 and 2023, where equity increased from approximately US$12,194 million to US$16,349 million.

Reported Debt to Equity Ratio

The reported debt to equity ratio has decreased substantially over the period, from 0.52 in 2020 to 0.32 in 2025. This decline reflects improving financial leverage, suggesting that equity growth outpaced increases in total debt, thereby strengthening the balance sheet.

Adjusted Total Debt

Adjusted total debt figures, which may incorporate additional liabilities or adjustments, show a consistent upward trend similar to reported total debt. The amount rose from US$5,707 million in 2020 to US$7,050 million in 2025, indicating a moderate increase in total obligations when considering adjusted metrics.

Adjusted Stockholders’ Equity

Adjusted equity also increased markedly during the period, from US$9,107 million in 2020 to US$19,710 million in 2025. The growth pattern closely mirrors that of reported equity, with a significant rise between 2022 and 2023.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio decreased from 0.63 in 2020 to 0.36 in 2025. This drop indicates enhanced capital strength even after accounting for the adjustments, with debt rising more slowly relative to equity.

Overall, the company has demonstrated a trend of strengthening equity relative to debt, as evidenced by declining debt to equity ratios under both reported and adjusted measures. Although total debt levels have increased, the more pronounced growth in equity suggests improved financial stability and a stronger balance sheet position over the analyzed period.

Total Debt

Total debt increased steadily over the analyzed period, rising from $5,448 million in 2020 to $6,555 million in 2025. This represents a moderate upward trend in nominal debt levels.

Total Capital

Total capital also exhibited consistent growth, starting at $16,026 million in 2020 and reaching $26,970 million by 2025. The increase in total capital outpaced the growth in total debt, indicating an expansion in overall capital base.

Reported Debt to Capital Ratio

The reported debt to capital ratio declined from 0.34 in 2020 to 0.24 in 2025. This demonstrates an improving leverage position, with debt constituting a smaller proportion of the total capital structure over time despite absolute debt increases.

Adjusted Total Debt

Adjusted total debt followed a similar upward path as total debt, rising from $5,707 million in 2020 to $7,050 million in 2025. The adjustment results in a slightly higher debt figure than the reported amount for each period.

Adjusted Total Capital

Adjusted total capital increased from $14,814 million in 2020 to $26,760 million in 2025, reflecting an overall capital growth consistent with the reported figures but on a slightly lower base initially.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio decreased from 0.39 in 2020 to 0.26 in 2025. This decline indicates improved financial stability and decreasing leverage when accounting for adjustments, aligning with the trend observed in the reported ratio but maintaining a generally higher leverage level.

Overall Insights

The data reveals a consistent expansion in both debt and capital components, with capital growing at a faster rate than debt. Consequently, leverage ratios have improved, suggesting a strengthening balance sheet position. The divergence between reported and adjusted figures indicates that adjustments provide a more conservative view of debt and capital but do not alter the underlying trend of deleveraging over the period analyzed.

The analysis of the financial data over the six-year period reveals consistent growth in the company's asset base and equity, alongside a gradual reduction in financial leverage, indicating evolving capital structure dynamics and risk profile.

Total Assets

Total assets have shown a steady increase from US$22,353 million in 2020 to US$36,299 million in 2025. This reflects an overall expansion in the company's resource base, with an approximate increase of 62% over the period. The upward trend has been consistent year-over-year, signaling ongoing asset accumulation and potential scale growth.

Stockholders’ Equity

Stockholders’ equity also increased significantly from US$10,578 million in 2020 to US$20,415 million in 2025, nearly doubling across the six years. The increase is particularly notable between 2022 and 2023, when equity rose sharply from US$12,194 million to US$16,349 million, followed by continued growth. This trend suggests effective capital retention and possibly enhanced profitability or capital infusions.

Reported Financial Leverage

The reported financial leverage ratio declined gradually from 2.11 in 2020 and 2021 to 1.78 by 2025. The leverage remained relatively stable between 2020 and 2022, fluctuating slightly around 2.11 to 2.19, before decreasing more markedly from 2023 onwards. This reduction indicates a lower degree of debt financing relative to equity, implying a strengthening balance sheet and potentially lower financial risk.

Adjusted Total Assets

Adjusted total assets mirror the upward pattern of reported total assets, increasing from US$20,672 million in 2020 to US$35,066 million in 2025. The adjusted figures are consistently below the reported totals, but the growth rate remains strong, confirming the company's consistent asset expansion even after adjustments.

Adjusted Stockholders’ Equity

Adjusted stockholders’ equity follows a similar trajectory to the reported equity, increasing from US$9,107 million to US$19,710 million. The increase is steady, with a significant jump between 2022 and 2023. This trend supports the view of improving internal capital strength after adjustments.

Adjusted Financial Leverage

The adjusted financial leverage ratio shows a decline from 2.27 in 2020 to 1.78 in 2025. While initially fluctuating slightly between 2.22 and 2.27 through 2022, it decreases consistently from 2023 onwards. This trend aligns with the reported leverage decline, reinforcing the interpretation of reduced reliance on debt and a stronger equity position when considering adjusted data.

Overall, the data depicts a company that has been steadily growing its asset base and equity capital while gradually reducing its financial leverage. The trend suggests improved financial stability and suggests an enhanced ability to manage debt. The significant equity increases in the middle of the period may reflect strategic capital actions or elevated retained earnings. Reductions in both reported and adjusted financial leverage indicate a potentially conservative approach to debt or increasing equity investments.

The company exhibits a consistent upward trend in net revenue over the analyzed period, increasing from $17,202 million in 2020 to $28,368 million in 2025. This steady revenue growth indicates sustained business expansion and market demand improvement.

Net income follows a similar positive trend, rising from $3,619 million in 2020 to a peak of $7,177 million in 2024, with a slight decline to $6,998 million in 2025. This indicates overall profitability improvement, although the small decrease in the final year may require further investigation.

Reported net profit margin shows an overall increase from 21.04% in 2020 to a high of 26.41% in 2024, before slightly declining to 24.67% in 2025. This suggests the company's efficiency in converting revenue into profit generally improved but faced pressures in the most recent period.

Adjusted net income trends similarly, increasing from $3,573 million in 2020 to $8,356 million in 2025, with a fluctuation in 2023 and 2024 where adjusted income temporarily decreased before rising sharply in 2025. This may indicate the impact of non-recurring items or adjustments becoming more favorable in the latest year.

The adjusted net profit margin moves upward from 20.77% in 2020 to 29.46% in 2025, with a dip during 2023-2024. The pronounced margin increase in 2025 reflects improved operational performance or beneficial adjustments impacting profitability.

Net Revenue

Exhibits steady, continuous growth throughout the period, indicating expanding sales and market share.

Net Income

Demonstrates strong growth, peaking in 2024 with a minor decline in 2025, signaling generally robust profitability.

Reported Net Profit Margin

Shows improvement from 2020 to 2024, highlighting enhanced profitability per dollar of revenue, with a slight contraction in the final year.

Adjusted Net Income

Follows a growth trajectory with a temporary dip in 2023-2024 before a significant rise in 2025, likely reflecting the impact of adjustments.

Adjusted Net Profit Margin

Increases markedly by 2025 despite interim declines, suggesting operational improvements or favorable adjustments influencing profit margins.

The financial performance demonstrates a generally positive trajectory in profitability metrics over the analyzed periods, with some fluctuations in efficiency indicators.

Net Income

The net income increased consistently from 3,619 million US$ in 2020 to a peak of 7,177 million US$ in 2024, before slightly declining to 6,998 million US$ in 2025. This shows a strong growth trend in earnings over the five-year horizon with a minor setback in the most recent year.

Stockholders’ Equity

Stockholders’ equity showed a steady rise from 10,578 million US$ in 2020 to 20,415 million US$ in 2025. The growth was particularly notable between 2022 and 2023, where an increase of approximately 3,155 million US$ occurred. This increasing equity base indicates strengthening of the company’s financial position and retained earnings over time.

Reported Return on Equity (ROE)

The reported ROE percentage fluctuated considerably, starting at 34.21% in 2020 and peaking at 53.51% in 2022. After that, however, there was a progressive decline, ending at 34.28% in 2025. Despite initial substantial improvement, the downward trend in recent years suggests reduced efficiency in generating profits from shareholders’ equity.

Adjusted Net Income

Adjusted net income displayed an overall upward trend, rising from 3,573 million US$ in 2020 to 8,356 million US$ in 2025. Notably, there was a slight decrease in 2023 before an increase resumed, highlighting potential adjustments for exceptional items affecting reported net income.

Adjusted Stockholders’ Equity

This metric increased from 9,107 million US$ in 2020 to 19,710 million US$ in 2025, reflecting similar trends to the reported equity but starting from a lower base. The adjusted figures suggest a more conservative measure of equity, consistently growing over time.

Adjusted Return on Equity (ROE)

The adjusted ROE started at 39.23% in 2020, reaching its highest at 60.95% in 2022, then declined to 38.80% in 2024 before rising again to 42.39% in 2025. This shows a pattern of initial strong improvement followed by volatility and a partial recovery. The adjusted ROE remains higher than the reported ROE across all years, indicating that adjustments enhance the apparent efficiency of equity utilization.

In summary, the period saw robust earnings growth and equity accumulation, accompanied by initial improvements in profitability ratios followed by some recent declines. The adjustments to net income and equity provide higher returns on equity than reported figures, suggesting the presence of non-recurring or extraordinary items influencing the raw data. Ongoing monitoring of ROE trends is advisable to assess the sustainability of return measures amid changing financial conditions.

The analysis of the company's annual financial data over the periods from 2020 to 2025 reveals several key trends in profitability and asset growth.

Net Income

Net income shows an overall upward trend from 3,619 million US dollars in 2020 to a peak of 7,177 million US dollars in 2024, followed by a slight decline to 6,998 million US dollars in 2025. This indicates steady profitability improvement over the years with a minor setback in the last period.

Total Assets

Total assets consistently increase each year, growing from 22,353 million US dollars in 2020 to 36,299 million US dollars in 2025. This suggests ongoing asset expansion and potentially increased investment or acquisitions, supporting growth objectives.

Reported Return on Assets (ROA)

The reported ROA starts at 16.19% in 2020, peaks at 24.41% in 2022, and then gradually declines to 19.28% by 2025. This trend highlights strong asset profitability in the mid-period but a diminishing return relative to assets in later years despite asset base growth, reflecting possible efficiency challenges or changes in asset composition.

Adjusted Net Income

Adjusted net income follows a general upward trend from 3,573 million US dollars in 2020 to 8,356 million US dollars in 2025, with a slight decrease noted in 2023 and 2024. This adjusted measure indicates improved operational profitability over the time frame, surpassing the net income growth rate in the latest year.

Adjusted Total Assets

Similar to total assets, adjusted total assets increase steadily from 20,672 million US dollars in 2020 to 35,066 million US dollars in 2025, reinforcing the perspective of sustained asset base enlargement under adjusted metrics.

Adjusted Return on Assets (Adjusted ROA)

Adjusted ROA initially rises from 17.28% in 2020 to a peak of 26.83% in 2022, then declines to 20.58% in 2024, before rebounding to 23.83% in 2025. This pattern suggests fluctuations in asset efficiency and profitability when adjusted for non-recurring items or one-offs, culminating in an improvement in the most recent year.

In summary, the company demonstrates robust growth in both net income and asset base over the six-year period, with notable peaks in profitability around 2022. The slight decreases in ROA metrics in later years indicate some reduction in asset utilization efficiency, although the rebound in adjusted ROA in 2025 signals potential operational improvements. The difference in trend patterns between reported and adjusted figures suggests that adjustments have a meaningful impact on the perceived profitability and efficiency measures.