Qualcomm Inc. (NASDAQ:QCOM)

The analysis of the quarterly financial ratios reveals notable trends and shifts over the observed periods.

Return on Assets (ROA)

The Return on Assets demonstrated an initial increasing trend starting around the late 2018 to early 2019 period. Beginning at approximately 13.31%, it rose steadily, peaking around 27.35% in the mid-2022 period. Subsequently, there was a gradual decline, decreasing to about 14.17% by the second quarter of 2023. Toward the latest periods analyzed, ROA showed a moderate recovery, reaching close to 19.94% by the end of 2024 and early 2025. This pattern indicates an improvement in the company's asset utilization efficiency over the initial years, followed by some challenges reducing asset returns, and then a partial resurgence in asset profitability.

Financial Leverage

Financial leverage exhibited a pronounced downward trajectory throughout the discussed periods. Starting from a high ratio of 9.47 at the end of 2018, there was a consistent and substantial reduction, reaching a low of approximately 2.00 by late 2024 to early 2025. This decline suggests a strategic move toward reducing reliance on debt or other leverage mechanisms, implying a stronger equity base and potentially lower financial risk. The leverage ratio’s steady decrease over time reflects improved balance sheet management and a more conservative capital structure approach.

Return on Equity (ROE)

Return on Equity displayed significant volatility and a general downward trend over the period evaluated. Starting data points in early 2019 denote a high ROE of around 89.35%, which peaked notably at 132.94% mid-2020. After this peak, there was a sustained decrease, falling to about 33.51% by early 2024. However, in the final quarters available, there was a slight upward adjustment, closing near 39.82% by early 2025. The initial sharp rise and subsequent decline in ROE correlate with the trends observed in financial leverage, indicating that changes in leverage had a substantial impact on equity returns. The high leverage amplified ROE in earlier periods, while its reduction contributed to the moderation of returns on equity in later years.

Overall, the data reflect a transition from a high-leverage, high-return environment to a more conservative financial structure with moderated profitability metrics. This evolution suggests a shift in financial strategy, balancing risk and return more conservatively in recent years.

The data reveals notable trends in key financial ratios over the periods analyzed. The focus is on Net Profit Margin, Asset Turnover, Financial Leverage, and Return on Equity (ROE).

Net Profit Margin

The Net Profit Margin, starting from the first reported value of 18.07%, shows an upward trajectory through subsequent quarters. It peaks around 30.52% in late 2021 before exhibiting a gradual decline to approximately 20.19% by late 2022. The margin then demonstrates some recovery in the most recent periods, stabilizing near 26% to 26.11%. This pattern suggests an initial improvement in profitability followed by a dip and a modest rebound.

Asset Turnover

Asset Turnover ratios begin near 0.74 and display fluctuations around this value. There is a decline observed in late 2019 to about 0.62, after which the ratio rises again, reaching a peak near 0.9 in late 2021. Post-2021, the ratio gradually decreases again to the range of 0.7–0.76 by the most recent quarters. This indicates variability in the efficiency of asset utilization with periods of both stronger and weaker performance but without a clear long-term upward or downward trend.

Financial Leverage

Financial Leverage shows a markedly decreasing trend, starting high at 9.47 and progressively reducing through the periods to about 2.0 in the latest quarter. The steep drop signals a significant reduction in the reliance on debt or other forms of leverage, indicating greater conservatism or deleveraging strategies over time which could influence risk profile and capital structure.

Return on Equity (ROE)

ROE exhibits a strong declining trend from initially extremely high values exceeding 130% in early 2020, with considerable volatility thereafter. The ratio decreases steadily to a level near 33%-39% in recent quarters. Despite the decline, ROE remains relatively high, underscoring sustained profitability from shareholders’ equity, but the reduction may reflect changes in profit generation or equity base expansion, possibly related to the decreasing financial leverage.

In summary, the financial ratios depict a period of improving profitability margin early on, followed by some normalization. Asset efficiency has shown moderate fluctuations without a clear long-term direction. The substantial reduction in financial leverage points toward a strategic shift towards lower financial risk. ROE remains robust though declining, likely influenced by lower leverage and variations in profitability and asset deployment.

The analysis of the quarterly financial ratios reveals several significant trends and patterns over the observed periods.

Tax Burden

The tax burden ratio shows initial fluctuations, starting from a lower point around 0.59 in late 2019, dipping slightly to 0.53, and then experiencing an increase to approximately 0.91 by the end of 2019 and early 2020. It maintains a relatively high and stable level between 0.87 and 0.99 thereafter, suggesting a consistent tax expense relative to pre-tax earnings in the more recent periods.

Interest Burden

This ratio varies somewhat but remains generally high, mostly above 0.90, indicating relatively low interest expenses relative to EBIT. It peaks around 0.97 in early to mid-2022 before slightly declining but stabilizing around 0.93 to 0.95 toward the latest quarters, demonstrating consistent performance in managing interest costs.

EBIT Margin

EBIT margin exhibits notable volatility, rising to mid-30% range in late 2018 and various points until mid-2021. However, it drops significantly to a low of around 18% in late 2019, rebounding afterward but then progressively declining from mid-2021 onward, reaching approximately 22-29% in the latest quarters. This trend indicates variability in operating profitability with a downward pressure emerging in recent years.

Asset Turnover

The asset turnover ratio shows a moderate increasing trend from about 0.62 in late 2019 to a peak close to 0.90 during 2021 and early 2022, indicating improved efficiency in utilizing assets to generate sales. However, from 2022 onward, turnover declines gradually to values around 0.68-0.76 by the most recent quarters, suggesting some erosion in asset utilization efficiency.

Financial Leverage

Financial leverage declines sharply from high levels above 9 in late 2018 and early 2019 down to around 2 by recent quarters. This significant reduction implies a strong deleveraging trend, reducing reliance on debt financing and potentially lowering financial risk over time.

Return on Equity (ROE)

ROE displays considerable volatility, peaking dramatically at over 130% in mid-2019 before gradually declining throughout subsequent periods. The downward trend continues steadily, ending near 40% in the latest quarters. This decline reflects the combined effects of decreasing EBIT margin, reducing financial leverage, and fluctuating asset turnover, indicating a contraction in equity profitability despite still relatively high returns compared to typical industry benchmarks.

In summary, the company demonstrates a pattern of strong tax and interest burden management with stable ratios in these areas. Operating profitability and asset utilization show cyclical tendencies, with recent signs of decline. The firm has notably reduced its financial leverage, which correlates with the persistent gradual decline in ROE. These patterns underscore a shift towards a more conservative financial structure with moderated yet still robust profitability levels.

The analysis of the quarterly financial ratios reveals several significant trends in profitability and efficiency metrics over the observed periods.

Net Profit Margin

The net profit margin shows a generally positive trajectory with some fluctuations. Beginning from the first data point available, the ratio was recorded at 18.07% and then experienced a moderate decline to as low as 13.72%. Following this dip, a consistent upward trend is observed, peaking at 30.52%. After this peak, the margin gradually decreases but remains robust, maintaining a level above 20% in most recent periods. The marginal decreases and subsequent recoveries suggest periods of varying cost management effectiveness or revenue changes, but overall profitability has strengthened significantly since the initial values.

Asset Turnover

The asset turnover ratio, which measures the efficiency of asset use to generate revenue, starts around 0.74 and exhibits slight fluctuations throughout the periods. Notably, there is a decline to 0.62 at one point, indicating a temporary reduction in asset utilization efficiency. Subsequently, the ratio rises again to a peak of approximately 0.90, showing improved operational efficiency. In later periods, the ratio demonstrates a minor downward adjustment, settling near 0.70 to 0.76. Despite these fluctuations, the overall trend suggests a relatively stable asset efficiency with phases of enhancement and slight declines.

Return on Assets (ROA)

The ROA reflects a pattern closely related to the trends in net profit margin and asset turnover. Initially recorded at 13.31%, it declines to around 8.49%, corresponding with the earlier dip in net margin and asset turnover. Subsequently, ROA exhibits a substantial upward movement, reaching a high above 27%. Such growth signifies effective utilization of assets in generating returns. Towards the latest periods, the ROA experiences a moderate reduction but remains higher than the starting values, fluctuating between 14% to nearly 20%. This indicates maintained, though slightly diminished, efficiency in asset-generated profitability relative to earlier quarters.

In summary, the financial ratios highlight a cycle of initial declines in profitability and efficiency, followed by recovery and growth to improved levels. Profitability metrics exhibit strong resilience with peaks that surpass initial measurements by a considerable margin. Efficiency in asset utilization fluctuates but remains effective. The combined trends suggest a company that has strengthened its financial performance over the observed timeline despite episodic challenges.

The financial indicators demonstrate notable fluctuations through the analyzed quarters, reflecting changes in operational efficiency and profitability.

Tax Burden

The tax burden ratio begins around 0.59 and declines gradually to approximately 0.53, followed by a sharp increase to about 0.91. It then stabilizes around the 0.87 to 0.91 range for several quarters, showing a slight upward trend in recent periods, nearing 0.95. This suggests a relatively higher proportion of pre-tax income retained after taxes in the earlier periods, with the company facing increased tax pressures or changes in tax strategy thereafter.

Interest Burden

The interest burden ratio maintains a generally stable trend within a narrow band between 0.84 and 0.97. There is an initial dip to 0.84, followed by recovery and stability around the mid-90s range. The consistency suggests steady interest expense management relative to operating earnings over time.

EBIT Margin

The EBIT margin exhibits considerable volatility. Starting at approximately 33.4%, it peaks at 36.3% during one quarter, before experiencing a significant decline to around 18.07%. Subsequently, it recovers gradually but remains below the initial high levels in later quarters, fluctuating mostly between 22% and 34%. The initial drop and subsequent partial recovery indicate periods of decreased operating profitability, potentially linked to increased costs or pricing pressures, followed by improved operational control.

Asset Turnover

Asset turnover ratio ranges from 0.62 to 0.9 across the periods, showing moderate variability. The trend shows an initial decrease to around 0.62, followed by steady improvement reaching 0.9, then a slight decline and stabilization near 0.7 to 0.76 in recent quarters. This pattern reflects changes in how efficiently the company utilizes its assets to generate revenue, with periods of higher efficiency succeeded by moderate slowdown.

Return on Assets (ROA)

ROA follows a trend consistent with EBIT margin movements, starting near 13.31%, dipping to around 8.49%, then rising substantially to peak around 27.35%. Later quarters see a decline to approximately 14.17%, followed by gradual improvement back towards 19.94%. This indicates fluctuations in overall profitability relative to asset base, influenced by operational performance and asset efficiency.

Overall, the data reflects an environment of operational challenges and recoveries. Profitability margins experienced volatility, with a notable decline followed by gradual improvements. Asset utilization trends also varied, suggesting changes in revenue generation efficiency. Tax and interest burdens remained relatively stable, with tax burden showing a gradual increase, potentially affecting net profitability.

The financial data reveals several notable trends across the reported periods for the key profitability and burden ratios.

Tax Burden

The tax burden ratio shows a significant variation initially, starting at 0.59 and decreasing slightly to around 0.53 before rising sharply to approximately 0.91. From that point forward, it remains relatively stable, fluctuating narrowly between 0.87 and 0.99, showing a general trend of increased tax impact on earnings in the majority of the later periods.

Interest Burden

This ratio remains fairly steady throughout the periods, with values generally ranging between 0.84 and 0.97. It displays minor fluctuations but no major upward or downward trend, indicating relatively consistent interest expense impact over the timeline.

EBIT Margin

The EBIT margin exhibits considerable volatility in the earlier periods, starting around 33%, then dropping substantially to 18% before recovering to the low 30% range. Afterward, there is a gentle decline from a peak of 36.3% toward about 26-29% in the most recent periods. The margin shows signs of a softening profitability trend from operating earnings in the latter periods.

Net Profit Margin

The net profit margin follows a pattern somewhat aligned with the EBIT margin but is generally lower. It starts near 18%, dips to a low around 13.7%, and later climbs to exceed 30% at one peak. Following this peak, the net margin gradually decreases to the low 20% range, then modestly recovers to around 26% in the most recent quarters. The pattern suggests variability in overall profitability after taxes and interest, with some recovery after declines.

Overall, the data indicates that while interest burden remains stable, the tax burden increased and stabilized at a higher level after initial fluctuations. Operating profitability experienced a decline from earlier highs, while net profit shows cyclical behavior, recovering from troughs but not consistently sustaining peak levels. This suggests external factors affecting tax rates and operational efficiency had a notable impact on profitability over the periods analyzed.