NVIDIA Corp. (NASDAQ:NVDA)

Return on Assets (ROA)

The ROA demonstrates variability over the years, initially declining from 16.15% in 2020 to 15.05% in 2021, followed by a significant increase to 22.07% in 2022. It then experiences a sharp drop to 10.61% in 2023 but rebounds substantially in the subsequent years, reaching 45.28% in 2024 and further increasing to 65.3% in 2025. This pattern indicates fluctuating operational efficiency with a notable improvement in recent years.

Financial Leverage

Financial leverage shows a moderate increase from 1.42 in 2020 to 1.7 in 2021, maintaining a similar level at 1.66 in 2022. It rises further to 1.86 in 2023 before decreasing steadily to 1.53 in 2024 and 1.41 in 2025. This trend illustrates a peak in leverage around 2023, followed by a reduction towards initial levels, suggesting a cautious adjustment of debt relative to equity in recent periods.

Return on Equity (ROE)

ROE exhibits an overall upward trajectory with some volatility. Starting at 22.91% in 2020, it rises to 25.64% in 2021 and further to 36.65% in 2022. A decline occurs in 2023, dropping to 19.76%, but this is followed by a dramatic increase to 69.24% in 2024 and an even higher 91.87% in 2025. The pronounced improvement in ROE towards the final years indicates a strong enhancement in shareholder returns, possibly influenced by changes in profitability and leverage.

Summary

Overall, the data highlights significant fluctuations in profitability and leverage from 2020 to 2025. While both ROA and ROE reveal periods of volatility, there is a consistent and strong recovery in the latter years, particularly in 2024 and 2025. Financial leverage peaked in 2023 but then declined, potentially reflecting strategic adjustments in capital structure. The sharp increases in ROE and ROA towards the end of the period suggest improved operational performance and returns to equity holders.

Net Profit Margin

The net profit margin experienced fluctuations over the observed period. Starting at 25.61% in 2020, it showed a slight increase to 25.98% in 2021, followed by a significant rise to 36.23% in 2022. A notable decline occurred in 2023, dropping to 16.19%. However, the margin rebounded strongly in the subsequent years, climbing sharply to 48.85% in 2024 and further to 55.85% in 2025, indicating improved profitability in the most recent years.

Asset Turnover

Asset turnover ratios indicate how efficiently assets are used to generate sales. The ratio started at 0.63 in 2020 and declined slightly to 0.58 in 2021. This was followed by a gradual increase to 0.61 in 2022 and 0.65 in 2023. The ratio then rose markedly to 0.93 in 2024 and further to 1.17 in 2025, suggesting an improvement in asset utilization over time, especially in the last two years.

Financial Leverage

Financial leverage showed variability during the period. From 1.42 in 2020, it increased to 1.7 in 2021 and slightly decreased to 1.66 in 2022. It peaked again at 1.86 in 2023 before declining to 1.53 in 2024 and further to 1.41 in 2025. The trend reflects fluctuating debt levels or equity financing, with leverage generally higher in the middle years and reducing towards the end of the period.

Return on Equity (ROE)

Return on equity exhibited substantial changes throughout the timeline. It started at 22.91% in 2020, increased to 25.64% in 2021, and then experienced a significant jump to 36.65% in 2022. A decline followed in 2023 to 19.76%. However, ROE surged dramatically in the last two years, reaching 69.24% in 2024 and an exceptional 91.87% in 2025. This indicates a strong increase in profitability relative to shareholder equity, corresponding with improvements in net profit margin and asset turnover combined with a reduction in financial leverage toward the end.

The analysis of the data reveals several significant trends and variations in the company's financial performance and operational efficiency over the reported periods.

Tax Burden

The tax burden ratio demonstrates relative stability with slight fluctuations, starting at 0.94 and reaching its peak at 1.04 in 2023 before declining to 0.87 in 2025. This suggests varying effective tax rates impacting the net profitability over time.

Interest Burden

Interest burden remains close to unity throughout the periods, fluctuating marginally between 0.94 and 1.00. This indicates consistent management of interest expenses relative to earnings before interest and taxes, showing an overall stable interest cost structure.

EBIT Margin

The EBIT margin exhibits considerable volatility, with an initial range around 27-28% in 2020 and 2021, peaking sharply to 37.81% in 2022. A significant drop to 16.47% occurs in 2023, followed by a dramatic increase to 55.93% in 2024 and a further rise to 64.58% in 2025. This pattern points to fluctuating operational efficiency and profitability from core business activities, possibly influenced by changes in revenue, cost management, or one-time events.

Asset Turnover

Asset turnover starts at moderate levels of 0.63 and 0.58, slightly increases to 0.61 and 0.65, and then shows substantial improvement to 0.93 in 2024 and 1.17 in 2025. This upward trend indicates enhanced efficiency in generating revenue from assets, reflecting better utilization or growth in sales relative to asset base over the latter periods.

Financial Leverage

Financial leverage rises from 1.42 in 2020 to a peak of 1.86 in 2023, signaling increased use of debt financing or other liabilities relative to equity. Subsequently, it declines to 1.53 and then further to 1.41 by 2025, suggesting a reduction in leverage and a move towards a more conservative capital structure in recent years.

Return on Equity (ROE)

ROE follows a pattern of initial growth from 22.91% in 2020 to a significant 36.65% in 2022, then dips substantially to 19.76% in 2023. Following this, there is a remarkable surge to 69.24% in 2024 and an even higher 91.87% in 2025. This increase reflects strong overall profitability for shareholders, likely driven by improvements in operational efficiency, asset utilization, and effective use of financial leverage, despite the previously noted volatility in EBIT margin and tax burden.

Net Profit Margin

The net profit margin exhibits considerable variability over the analyzed periods. Starting at 25.61% in early 2020, it experienced a slight increase to 25.98% in 2021, followed by a significant rise to 36.23% in 2022. The margin then declined sharply to 16.19% in 2023, before rebounding strongly to 48.85% in 2024 and further increasing to 55.85% in 2025. This pattern indicates periods of both contraction and expansion in profitability efficiency relative to revenue, with particularly notable improvements in the last two years.

Asset Turnover

The asset turnover ratio demonstrates a moderate upward trend throughout the period. It began at 0.63 in 2020 and slightly decreased to 0.58 in 2021. Subsequently, it increased modestly to 0.61 in 2022 and 0.65 in 2023. A more pronounced improvement is observed in 2024 and 2025, reaching 0.93 and 1.17 respectively. This suggests that the company has become increasingly efficient in utilizing its assets to generate sales, especially in the more recent years.

Return on Assets (ROA)

Return on assets mirrors the fluctuations in net profit margin but with even greater magnitude. Initially, it declined from 16.15% in 2020 to 15.05% in 2021, then rose substantially to 22.07% in 2022. A sharp decrease followed in 2023 to 10.61%, before a remarkable surge to 45.28% in 2024 and a further increase to 65.3% in 2025. These swings indicate significant variability in how effectively the company converts its asset base into net income, with recent years showing notable gains in asset profitability.

The financial data reveals several notable trends in key profitability and efficiency ratios over the analyzed periods.

Tax Burden

The tax burden ratio exhibits fluctuations, initially increasing from 0.94 to a peak of 1.04 by January 29, 2023, indicating a brief period of tax expense exceeding pretax earnings. Subsequently, it declines to 0.87 by January 26, 2025, suggesting a lower effective tax rate or higher tax benefits in recent years.

Interest Burden

This ratio remains relatively stable throughout the periods, oscillating narrowly around 0.96 to 1.00. The ratio approaches 1.00 in the latest periods, indicating minimal interest expense relative to earnings before interest and taxes, a positive indicator of low financial leverage or effective debt management.

EBIT Margin

The EBIT margin demonstrates significant variability. Starting at around 27.7% in early 2020 and maintaining near this level in 2021, it sharply rises to 37.8% in 2022, then drops substantially to 16.5% in 2023. The margin rebounds strongly thereafter, reaching an elevated 64.6% by 2025. This pattern suggests considerable shifts in operational efficiency or cost management over the years.

Asset Turnover

The asset turnover ratio shows a general upward trend, beginning at 0.63 and slightly declining to 0.58 by early 2021. From there, it steadily increases, particularly after 2023, climbing to 1.17 by 2025. This indicates improved utilization of assets to generate revenue, reflecting enhanced operational productivity or growth in sales relative to asset base.

Return on Assets (ROA)

ROA mirrors the fluctuations observed in the EBIT margin and asset turnover, starting at 16.2% in 2020, decreasing to 10.6% in 2023, and then rising markedly to 65.3% in 2025. The sharp increase in ROA in the last two years indicates a strong improvement in profitability relative to total assets, driven by both increased EBIT margin and asset efficiency.

Overall, the data depicts a period of fluctuation in profitability and tax burden ratios, with recent years marked by notable improvements in operational efficiency and profitability metrics. The rising asset turnover and strong rebound in EBIT margin contribute to significantly enhanced returns on assets, indicating effective management actions and possibly favorable market conditions.

The financial data over the six-year period reveals several notable trends in profitability and financial efficiency ratios.

Tax Burden

The tax burden ratio remains relatively stable from 2020 through 2022, fluctuating slightly between 0.94 and 0.98. However, from 2023 onward, there is a noticeable decline, dipping below 1 to 0.88 by 2024 and further to 0.87 in 2025. This suggests a decreasing proportion of earnings paid as tax, which could positively impact net profitability.

Interest Burden

The interest burden ratio exhibits minor fluctuations but remains close to 1 throughout the period, with values ranging between 0.94 and 1. This indicates that interest expenses are relatively stable in relation to earnings before interest and taxes, and do not significantly erode operating income.

EBIT Margin

The EBIT margin shows a marked increase over the period, with fluctuations evident. Starting around 27.68% in 2020 and remaining steady through 2021, it spikes sharply to 37.81% in 2022. A steep decline occurs in 2023 to 16.47%, which is followed by a substantial recovery and growth, ending with a high of 64.58% in 2025. This volatility might be attributed to variability in operating costs or revenue fluctuations, but the sharp improvement in the final years indicates enhanced operational efficiency or higher revenue retention.

Net Profit Margin

Similar to the EBIT margin, the net profit margin trends upwards with some variability. It starts at 25.61% in 2020, reaches 36.23% in 2022, dips to 16.19% in 2023, and then rises significantly to 55.85% by 2025. The net profit margin follows the EBIT margin pattern closely, reflecting the impact of tax and interest burden changes on bottom-line profitability.

Overall, the data outlines a pattern of strong profitability with notable volatility around 2023. The later years demonstrate significant improvements in both operating and net profitability margins, accompanied by reduced tax burden, which collectively suggest enhanced financial performance and efficiency.