Qualcomm Inc. (NASDAQ:QCOM)

Return on Assets (ROA)

The Return on Assets displays a fluctuating trend over the period, starting at 14.6% and reaching a peak of 26.39% before declining to 11.05% by the latest date. This indicates variability in how effectively the company utilizes its assets to generate earnings, with a notable decrease in recent years.

Financial Leverage

Financial leverage has consistently decreased from 5.86 to a range between 2.1 and 2.36 by the end of the period. This reduction implies a strategic move towards lower reliance on debt financing, resulting in a more conservative capital structure over time.

Return on Equity (ROE)

The Return on Equity demonstrates a steep decline from a very high level of 85.54%, peaking at 90.88%, then dropping sharply to a range between 26.13% and 38.6% later in the period. The sharp decreases correspond with the reduction in financial leverage, suggesting a direct relationship between leverage usage and equity returns.

Net Profit Margin

The net profit margin exhibited variability over the analyzed periods. It started at 22.09% and increased to a peak of 29.27% by the third period. This was followed by a notable decline to 20.19%, then a recovery to 26.03% before ultimately dropping to 12.51%. The recent decrease to nearly half the margin compared to the peak suggests pressures on profitability or increased costs affecting net earnings.

Asset Turnover

Asset turnover showed an overall upward trend with some fluctuations. Starting from 0.66, it improved to 0.9 by the third period, indicating more efficient use of assets to generate revenue. A decline to 0.7 was observed in the fourth period, followed by a slight increase to 0.71 and eventually reaching 0.88. This pattern reflects variable efficiency in asset utilization but a general improvement compared to the beginning of the timeframe.

Financial Leverage

Financial leverage exhibited a consistent downward trend, decreasing from 5.86 to 2.36 over the periods. This suggests a reduction in reliance on debt relative to equity, indicating a possible strategic shift towards a more conservative capital structure or improved equity financing.

Return on Equity (ROE)

The ROE metrics showed a significant decreasing trend. It started very high at 85.54% and peaked slightly higher at 90.88%. Subsequently, a sharp decline to 33.51% occurred, followed by moderate recoveries to 38.6%, and then a further drop to 26.13%. This declining trend in ROE despite the decreasing financial leverage may indicate challenges in generating profits from shareholders' equity or changes in operational efficiency.

The financial ratios over the observed periods reveal several notable trends and fluctuations.

Tax Burden

The tax burden ratio showed a slight decline from 0.91 in 2020 to 0.87 in 2022, followed by a sharp increase approaching nearly 1.0 in 2023 and 2024, indicating a period of minimal tax shield or tax benefits. In 2025, there was a significant reduction to 0.44, suggesting a substantial change in tax expenses or tax strategy.

Interest Burden

This ratio remained relatively stable with a modest increase from 0.90 in 2020 to around 0.95 in the later years, except for a dip to 0.91 in 2023. This implies consistent control over interest expenses relative to earnings before interest and taxes.

EBIT Margin

The EBIT margin increased from 26.86% in 2020 to a peak of 34.93% in 2022, reflecting improved operational efficiency or profitability. However, there was a sharp decline to 22.42% in 2023, after which it rebounded moderately to 30.09% by 2025.

Asset Turnover

Asset turnover improved significantly from 0.66 in 2020 to 0.90 in 2022, indicating more effective use of assets to generate sales. This was followed by a decline to 0.70 in 2023 and stabilization around 0.7 to 0.88 in the subsequent years, showing some variability but overall maintaining relatively high utilization levels.

Financial Leverage

There was a consistent decrease in financial leverage from a high of 5.86 in 2020 down to around 2.10 by 2024, with a slight increase to 2.36 in 2025. This trend suggests a deliberate reduction in reliance on debt financing over time, improving financial stability.

Return on Equity (ROE)

ROE experienced a notable decline over the years, starting from an exceptionally high 85.54% in 2020, peaking at 90.88% in 2021, then dropping substantially to 33.51% in 2023, and further to 26.13% in 2025. This decline coincides with reductions in financial leverage and fluctuating EBIT margins, indicating lower profitability and efficiency in generating shareholder returns.

Net Profit Margin

The net profit margin exhibited notable fluctuations over the analyzed periods. Starting at 22.09% in 2020, it saw an upward trend reaching a peak of 29.27% in 2022. This was followed by a significant decline to 20.19% in 2023, a partial recovery to 26.03% in 2024, and then a sharp decrease to 12.51% in 2025. This pattern indicates variability in profitability, with substantial volatility particularly in the latter years.

Asset Turnover

Asset turnover ratio showed moderate variation throughout the periods. It initially increased from 0.66 in 2020 to a high of 0.90 in 2022, suggesting improved efficiency in using assets to generate revenue. However, there was a decline to 0.70 in 2023 and a slight increase afterward, ending at 0.88 in 2025. Overall, asset utilization experienced an improvement trend, albeit with some inconsistency.

Return on Assets (ROA)

Return on assets followed a somewhat parallel trend to the net profit margin. Beginning at 14.6% in 2020, it increased sharply to 26.39% by 2022, then declined markedly to 14.17% in 2023. A moderate recovery to 18.39% occurred in 2024, followed by another decline to 11.05% in 2025. This suggests a variable ability to generate earnings from assets, with a downward trend in the most recent period.

The analysis of the financial data over the six-year period reveals several notable trends across key profitability and efficiency ratios.

Tax Burden

The tax burden ratio demonstrates general stability from 2020 through 2024, maintaining values near 0.9 or higher, indicating relatively consistent effective tax rates during those years. However, in the most recent period, there is a significant drop to 0.44, suggesting either a substantial reduction in taxes relative to pre-tax income or the impact of tax credits, adjustments, or non-recurring tax benefits in that year.

Interest Burden

The interest burden ratio remains strong and stable across the timeline, fluctuating narrowly between 0.90 and 0.97. This implies consistent management of interest expenses relative to earnings before interest and taxes, with no significant deterioration or improvement in the company's ability to manage financial leverage costs.

EBIT Margin

The EBIT margin exhibits an upward trend from 26.86% in 2020 to a peak of 34.93% in 2022, reflecting improved operational efficiency or pricing power during this period. However, in 2023, there is a notable decline to 22.42%, indicating pressure on operating profitability. The margin partially recovers in the subsequent years to 28.4% and 30.09%, suggesting some operational improvements but still below the peak of 2022.

Asset Turnover

Asset turnover ratio rises steadily from 0.66 in 2020 to 0.9 in 2022, reflecting improved efficiency in generating sales from assets. It then declines to 0.7 in 2023 and stabilizes around 0.71 before increasing again to 0.88 by 2025. This pattern indicates some fluctuations in asset utilization efficiency but an overall trend toward better utilization in recent years.

Return on Assets (ROA)

ROA follows a similar trajectory to the EBIT margin and asset turnover, with growth from 14.6% in 2020 to a high of 26.39% in 2022, indicating strong asset profitability. Subsequently, ROA declines sharply to 14.17% in 2023 and maintains a downward trend to 11.05% by 2025. This decline suggests diminished overall profitability of assets despite improvements in some operational metrics in the later periods.

In summary, the company experienced a period of improving profitability and efficiency up to 2022, with increases in EBIT margin, asset turnover, and ROA. Starting in 2023, there is a noticeable contraction in operating profitability and asset returns, even as asset turnover shows signs of recovery near the end of the period. Additionally, the dramatic decrease in the tax burden ratio in the final year could have materially influenced net profitability. The interest burden remained consistently manageable throughout.

Tax Burden Ratio

The tax burden ratio shows a slight decline from 0.91 in 2020 to 0.87 in 2022, indicating a gradual decrease in the proportion of earnings retained after taxes during this period. However, there is a notable increase to nearly 0.99 in 2023 and remains high at 0.98 in 2024 before sharply dropping to 0.44 in 2025. This suggests significant fluctuations in tax impact, with an especially substantial reduction in the tax burden in the most recent year.

Interest Burden Ratio

The interest burden ratio exhibited consistent improvement from 0.90 in 2020 to 0.97 in 2022, reflecting a reduction in interest expenses relative to earnings before interest and taxes. This trend stabilizes, with values around 0.91 to 0.95 between 2023 and 2025, indicating relatively steady interest expense management over the latter years.

EBIT Margin (%)

The EBIT margin experienced strong growth reaching a peak of 34.93% in 2022, up from 26.86% in 2020, highlighting improving operational efficiency or profitability. In 2023, there was a significant decline to 22.42%, followed by a recovery to 28.40% in 2024 and again a rise to 30.09% in 2025. This pattern reflects volatility in operating profitability but shows an overall positive rebound after the dip.

Net Profit Margin (%)

The net profit margin follows a similar pattern to EBIT margin with growth from 22.09% in 2020 to 29.27% in 2022. There is a marked drop in 2023 to 20.19%, indicating challenges affecting the net profitability. A subsequent partial recovery to 26.03% in 2024 is observed, but then a sharp decline to 12.51% in 2025 signals significant profitability pressures in the most recent period.

Summary

Overall, the financial margins demonstrate an initial phase of improvement in profitability and expense management up to 2022, followed by volatility and declines in 2023. While operational margins (EBIT) show signs of recovery, net profit margins face a more severe downturn by 2025. The tax burden variability and the sharp decrease in 2025 suggest changing tax impacts or extraordinary items influencing net results. Interest expenses appear controlled with stable ratios throughout the periods analyzed.