Broadcom Inc. (NASDAQ:AVGO)

The annual financial data reveals distinct trends in profitability, invested capital, and efficiency over the examined periods.

Net Operating Profit After Taxes (NOPAT)

The NOPAT exhibits significant fluctuations, starting at 3,151 million USD and rising steadily over the initial four years, reaching a peak of 14,443 million USD. However, a notable decline occurs in the fifth year to 11,082 million USD, before a strong recovery to 23,367 million USD in the final year, the highest value in the series.

Invested Capital

Invested capital demonstrates a relatively stable trend during the first four years, with values ranging narrowly between approximately 62,112 million USD and 65,949 million USD. A sharp increase is observed in the fifth year, more than doubling to 141,001 million USD, followed by a moderate rise to 150,047 million USD in the last year.

Return on Invested Capital (ROIC)

ROIC shows progressive improvement through the initial four years, increasing from 4.78% to a peak of 23.04%, indicating enhanced efficiency in generating returns from invested capital. This is followed by a pronounced decline to 7.86% in the fifth year, coinciding with the large increase in invested capital. In the final year, ROIC recovers partially to 15.57%, suggesting a rebound in operational performance relative to the capital base.

Overall, the data reflects initial growth in profitability and operational efficiency, challenged by a large capital expansion in the fifth year, which temporarily diluted return on invested capital. The final year shows signs of recovery with improved profitability and ROIC, although invested capital remains elevated relative to earlier periods. This pattern suggests strategic investments impacting short-term efficiency but potentially positioning for future growth.

Operating Profit Margin (OPM)

The operating profit margin demonstrated significant growth from 17.06% in 2020 to a peak of 45.19% in 2023, indicating improved operational efficiency and profitability during this period. However, there was a notable decline to 26.4% in 2024, followed by a recovery to 40.1% in 2025. This fluctuation suggests some volatility in cost management or revenue quality during the latter years.

Turnover of Capital (TO)

The turnover of capital exhibited a general upward trend from 0.36 in 2020 to a high of 0.57 in 2023, reflecting enhanced efficiency in utilizing capital to generate revenue. After reaching this peak, the ratio dropped to 0.37 in 2024 but showed a slight increase to 0.43 in 2025. The declines in 2024 and 2025 indicate some inconsistency in capital utilization efficiency.

1 – Effective Cash Tax Rate (CTR)

This metric increased steadily from 77.32% in 2020 to a peak of 90.41% in 2022, maintaining elevated levels above 81% in the following years. The peak and sustained high values suggest that the company's effective cash tax rate has been relatively high and stable, implying limited tax benefits or credits impacting cash taxes payable.

Return on Invested Capital (ROIC)

Return on invested capital showed considerable improvement from 4.78% in 2020 to a peak of 23.04% in 2023, reflecting heightened overall profitability and effective use of invested capital through this period. However, in 2024 the ROIC declined sharply to 7.86%, before partially recovering to 15.57% in 2025. This pattern signals some challenges in sustaining returns in the most recent periods, potentially due to either reduced operating margins or less efficient capital deployment.

Net Operating Profit Before Taxes (NOPBT)

The net operating profit before taxes showed a general upward trend over the periods analyzed. It increased significantly from 4,076 million USD in 2020 to 25,621 million USD in 2025, indicating strong profit growth capacity. Notably, there was a steady rise each year, with a slight dip observed in 2024 where the profit fell to 13,616 million USD from 16,188 million USD the previous year, before recovering sharply in 2025.

Net Revenue

Net revenue consistently increased throughout the period, rising from 23,888 million USD in 2020 to 63,887 million USD in 2025. This upward trend reflects robust sales growth. The most significant jump occurred between 2023 and 2024, where revenue grew from 35,819 million USD to 51,574 million USD, representing an acceleration in the company's ability to generate income from its operations.

Operating Profit Margin (OPM)

The operating profit margin experienced considerable fluctuations across the years. It started at 17.06% in 2020 and increased to a peak of 45.19% in 2023, demonstrating improving operational efficiency. However, there was a noticeable decline to 26.4% in 2024, followed by a recovery to 40.1% in 2025. These variations suggest periods of changing cost structures or pricing strategies affecting profitability despite growing revenues.

Summary of Trends

Overall, the data reveal significant growth in both revenue and operating profits over the six-year span, with strong profitability improvements especially evident in the middle years. The decline in margin and profit in 2024 signals a potential challenge or change that impacted efficiency or expenses temporarily. Nonetheless, the rebound in 2025 indicates a restoration of favorable operational conditions. The company's ability to expand revenue while maintaining relatively high operating margins points to effective management of costs and operational leverage.

The financial data reveals several notable trends in the company's performance over the indicated periods. Net revenue demonstrates a consistent upward trajectory, increasing steadily from 23,888 million US dollars in late 2020 to 63,887 million US dollars by the end of 2025. This reflects significant growth in sales or service delivery capabilities.

In contrast, invested capital exhibits some fluctuation in the earlier years, decreasing slightly from 65,949 million US dollars in 2020 to 62,112 million US dollars in 2022, then stabilizing around 62,674 million US dollars in 2023. However, a marked increase is observed starting in 2024, with invested capital more than doubling to 141,001 million US dollars, and rising further to 150,047 million US dollars in 2025. This suggests substantial new investment or asset accumulation in the later periods.

Turning to the turnover of capital (TO) ratio, which measures revenue generated per unit of invested capital, the data indicates an initial improvement. The ratio increases from 0.36 in 2020 to 0.57 in 2023, indicating enhanced efficiency in asset utilization. Nevertheless, this trend reverses in the final two years, with the TO ratio declining to 0.37 in 2024 before partially recovering to 0.43 in 2025. This decline corresponds with a large increase in invested capital, suggesting that the growth in assets outpaced revenue gains temporarily, thereby reducing capital efficiency.

Summary of Observations

- Steady and substantial growth in net revenue over the six-year period.

- Initial slight decline followed by stabilization and then a sharp increase in invested capital in the last two years.

- Improvement in capital turnover until 2023, followed by decreased efficiency during 2024 and 2025 linked to rapid capital expansion.

Overall, the data portrays a company expanding its revenue base significantly, supported by considerable reinvestment in capital assets in the later years. The temporary dip in capital efficiency may indicate a transitional phase where new investments have yet to fully translate into proportional revenue growth.

Cash Operating Taxes

The cash operating taxes exhibit a general upward trajectory from 2020 to 2024, increasing from $925 million to a peak of $2,534 million. However, in 2025, there is a slight decline to $2,254 million, suggesting a moderate reduction in cash tax outflows after a period of growth.

Net Operating Profit Before Taxes (NOPBT)

The net operating profit before taxes shows a significant and consistent increase over the six-year period. Starting at $4,076 million in 2020, it nearly doubles by 2021 to $8,500 million, then continues to climb sharply to $14,258 million in 2022 and $16,188 million in 2023. After a slight dip to $13,616 million in 2024, the figure surges to its highest point of $25,621 million in 2025. This pattern indicates robust profitability growth with a minor fluctuation in 2024.

Effective Cash Tax Rate (CTR)

The effective cash tax rate demonstrates considerable variability throughout the period. Initially at 22.68% in 2020, the rate declines substantially to 16.5% in 2021 and continues to drop to a low of 8.8% by 2025, with a slight increase to 18.61% in 2024. This overall downward trend in tax rate, despite fluctuations, may reflect changes in tax planning strategies, tax regulations, or profit composition affecting taxable income.

Summary of Trends and Insights

The data reveals a strong increase in profitability before taxes, implying enhanced operational performance or revenue growth. The rise in cash operating taxes aligns generally with the enhanced profitability but is moderated by the declining and volatile effective cash tax rate, which suggests strategic tax management or changes in tax liabilities. The notable dip in both NOPBT and cash taxes in 2024 followed by recovery in 2025 could indicate cyclical factors or one-time adjustments impacting financial performance and tax obligations. Overall, the financial profile reflects significant growth in earnings capacity with more efficient tax expense management over the analyzed timeframe.