NVIDIA Corp. (NASDAQ:NVDA)

The analysis of the quarterly financial ratios reveals several notable trends in the company's performance over the observed periods.

Return on Assets (ROA)

The ROA demonstrates an overall increasing trend with fluctuations across the quarters. Starting at 14.27%, it experienced some moderate volatility in the initial periods, increasing to a peak of 22.07% by January 30, 2022. Thereafter, ROA dipped to around 10.61% in January 29, 2023, before exhibiting a strong upward trajectory, reaching an impressive level above 65% by the October 27, 2024 quarter. In the last observed quarters, ROA slightly stabilizes, maintaining above 61% but showing a modest decline moving into 2025.

Financial Leverage

The financial leverage ratio remained relatively stable throughout the periods, fluctuating within a narrow range between 1.36 and 1.90. Early periods saw leverage hovering near 1.7 to 1.8, with a short increase to 1.90 observed in October 30, 2022. From late 2023 through 2025, the ratio generally declined gradually, reaching the lowest level of 1.36 by the last quarter. This indicates a slight decrease in the company’s reliance on debt financing over time.

Return on Equity (ROE)

ROE shows a pattern closely related to that of ROA but with a higher magnitude, reflecting leverage effects. Initially near 25%, it climbed steadily to mid-30% levels by early 2022, then saw a marked drop to below 20% by January 29, 2023. Subsequent quarters registered a remarkable surge with ROE peaking near 96% in late 2024. The trend slightly reversed in 2025, with a small decrease but ROE remained robustly above 80%. This indicates greatly enhanced profitability on shareholders’ equity.

In summary, across the quarters observed, the company shows improved efficiency in asset utilization and shareholder returns, as evidenced by the increasing ROA and ROE. The gradual reduction in financial leverage suggests a more conservative capital structure approach, which may contribute to the stabilizing leverage ratio despite rising profitability. The substantial increases in both ROA and ROE in recent quarters signal strong operational and financial performance, though the slight tapering toward the end of the data series suggests monitoring for potential volatility in future periods.

A review of the financial ratios over the examined quarters reveals distinct trends in profitability, efficiency, leverage, and overall return on equity.

Net Profit Margin (%)

The net profit margin exhibited a generally upward trend with fluctuations. Starting from 28.18% in the earliest period, it experienced some declines and recoveries, notably dipping to 16.19% before rising sharply afterwards. The margin attained its peak above 55% in multiple recent quarters, indicating increasingly stronger profitability relative to revenue over time.

Asset Turnover (ratio)

Asset turnover demonstrated a consistent improvement throughout the periods. The ratio increased from 0.51 to values exceeding 1.0 towards the later dates, peaking at around 1.19. This increase reflects growing efficiency in using assets to generate sales, suggesting operational enhancements or changes in asset management.

Financial Leverage (ratio)

Financial leverage showed a moderately declining trend in recent terms after some fluctuations earlier on. Starting near 1.78, the ratio varied between 1.64 and 1.9 but gradually dropped closer to 1.36 by the latest quarter. This trend may signify a reduction in debt relative to equity, implying a more conservative capital structure or repayment of liabilities.

Return on Equity (ROE) (%)

The ROE figures reveal significant growth with notable volatility. The metric increased from about 25.34% initially, saw some declines to below 20%, but then surged dramatically in the last several quarters, reaching values as high as 95.71%. Despite some recent moderation, the level remains elevated, reflecting highly effective use of shareholders' equity to generate profit.

Overall, the data indicate that the company enhanced its profitability and operational efficiency over time, complemented by a slight reduction in leverage. The exceptional rise in ROE aligns with these improvements, suggesting highly favorable returns on equity investments in the most recent periods. These patterns collectively point toward strengthened financial performance and operational management across the timeframe analyzed.

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

Tax Burden

The tax burden ratio remained relatively stable around the high 0.9s through early periods but exhibits a consistent decline starting from the recent quarters, dropping from a peak above 1.05 down to 0.85 by the last period. This suggests a reduction in tax expenses relative to pre-tax income over time.

Interest Burden

The interest burden ratio shows very minimal variation, consistently remaining near or at 1 during the later periods. This indicates that the impact of interest expenses on earnings before taxes has been minimal and stable.

EBIT Margin

The EBIT margin experienced fluctuations in earlier quarters, declining from around 30.79% to lows near 16.47%, but then showed a strong and sustained upward trend starting mid-2023. The margin peaked impressively above 64%, reflecting improved operating profitability and potential cost efficiencies or revenue growth strategies taking effect.

Asset Turnover

Asset turnover initially increased steadily from 0.51 to approximately 0.71 but experienced a temporary decrease around early 2023 before rising sharply afterward. The ratio reached a high of about 1.19 in later periods, implying enhanced efficiency in utilizing assets to generate revenue over time.

Financial Leverage

Financial leverage showed moderate fluctuations, generally trending downward from 1.78 to about 1.36 by the end of the period. This suggests a gradual reduction in reliance on debt or other liabilities to finance assets, possibly reflecting a strategic deleveraging or equity strengthening approach.

Return on Equity (ROE)

The ROE exhibited volatility with moderate values around 25% early on, declining to below 20% in certain quarters, followed by a pronounced and continuous increase from mid-2023 onward. It peaked near 95.7%, indicating a substantial increase in shareholder returns driven by improved operating performance, efficient asset usage, and leveraged capital structure.

Overall, the company has shown strong improvements in operational profitability and capital efficiency in recent quarters. The combination of rising EBIT margins, increased asset turnover, and a manageable reduction in financial leverage supports a marked growth in return on equity. Stability in interest expense impact and a slightly decreasing tax burden further enhance net profitability metrics. These trends imply a strengthening financial position and effective management actions to optimize both operational performance and capital structure.

Net Profit Margin

The net profit margin showed variability over the observed periods, initially ranging around 25% to 28% and experiencing a marked increase starting from mid-2023. The margin peaked at 55.85% in January 2025 before slightly declining but remaining above 50% towards the end of the series. This indicates a significant improvement in profitability relative to revenue, suggesting effective cost management or pricing strategies that enhanced earnings efficiency.

Asset Turnover

Asset turnover exhibited a generally upward trend throughout the time frame. Starting from a low of approximately 0.51 in April 2020, it gradually increased to reach values above 1.1 by early 2025. This trend reflects enhanced efficiency in using assets to generate revenue, with more than doubling the turnover ratio from the beginning to the end of the period. The increase demonstrates stronger operational performance and asset utilization.

Return on Assets (ROA)

The ROA metric mirrored the patterns of net profit margin and asset turnover, displaying substantial growth over the timeline. Initially at around 14%, it steadily climbed, surpassing 60% in the last observations. The ROA increase indicates improved overall profitability generated from assets, combining both the gains in profit margins and asset utilization efficiencies. Such a strong ROA suggests highly effective management in deploying company resources to generate earnings.

Tax Burden

The tax burden ratio exhibits a relatively high and stable trend, generally remaining close to or slightly below 1.0, indicating that taxes have a modest impact on net income. Over time, there is a slight decline observed starting from early 2023, with the ratio decreasing from values around 1.04 to approximately 0.85 by late 2025. This suggests a gradual reduction in the proportion of earnings paid as tax.

Interest Burden

The interest burden ratio shows very consistent values close to 1.0 throughout the entire period. Initially fluctuating slightly below 1.0, from early 2024 onward it stabilizes at exactly 1.0, implying very low or no interest expense affecting operating income. This consistent ratio indicates stable financial leverage and interest expense management.

EBIT Margin

The EBIT margin percentage reveals a pronounced upward trend with significant fluctuations. Starting around 30.79% in early 2020, it initially declines to a low of approximately 16.47% by early 2023. After this dip, a strong recovery and substantial growth occur, reaching a peak of about 64.59% in late 2024. This pattern signifies varying operational profitability, with a notable improvement in efficiency and cost control during the latter periods.

Asset Turnover

Asset turnover ratio displays a clear increasing trajectory over the timeframe. Beginning at 0.51 in early 2020, it progressively rises to about 1.16 by late 2025. This growth indicates enhanced efficiency in using assets to generate revenue, reflecting either improved operational performance or asset utilization strategies.

Return on Assets (ROA)

ROA follows a pattern similar to EBIT margin and asset turnover, showing a strong growth trend with fluctuations. From an initial return of roughly 14.27% in early 2020, the ROA experiences a dip to just over 10% around early 2023. Subsequently, it climbs sharply to exceed 65% by late 2024, before slightly tapering but remaining above 60% towards the end of the period. This indicates a substantial increase in asset profitability and overall company efficiency.

Tax Burden

The tax burden ratio exhibited a general decline over the analyzed quarters. Starting near 0.93 to 0.98 between 2020 and early 2023, it increased slightly, peaking around 1.05 before steadily decreasing thereafter. From mid-2023 onward, the ratio consistently decreased, stabilizing close to 0.85 by the end of the period. This trend suggests a gradual reduction in effective tax expenses relative to earnings over time.

Interest Burden

The interest burden ratio remained relatively stable throughout, fluctuating narrowly between 0.94 and 0.99 for most of the timeline. From early 2024 onwards, this ratio consistently equaled 1, indicating no interest expense impact on earnings in the latter periods. This stability implies effective management or reduction of interest costs over the reporting periods.

EBIT Margin

The EBIT margin underwent significant fluctuations. It initially declined from approximately 30.79% in early 2020 to a low near 16.47% by the start of 2023. Following this low, there was a marked and sharp increase, culminating at a peak of about 64.59% in mid to late 2024. The margin remained high and relatively stable toward the end of the period, averaging around 60-62%. This pattern indicates that the company improved its operating efficiency and profitability substantially after early 2023.

Net Profit Margin

The net profit margin largely mirrored the trend of the EBIT margin. It decreased steadily from around 28.18% in early 2020 to a trough near 16.19% at the beginning of 2023. Subsequently, it rose significantly, reaching a high of approximately 55.85% by 2024. Towards the final quarters, it slightly decreased but stayed robust above 50%. This demonstrates enhanced overall profitability and cost management following a challenging period up to early 2023.