Take-Two Interactive Software Inc. (NASDAQ:TTWO)

Return on Assets (ROA)

The Return on Assets exhibited a generally declining trend over the observed periods. Initially maintaining positive values between approximately 8% and 10%, ROA peaked near 10.34% in mid-2021 before gradually diminishing. Starting in mid-2022, it crossed into negative territory and progressively worsened, reaching a notably steep decline to nearly -49% by the first quarter of 2025. This significant drop indicates deteriorating asset profitability and operational challenges during the most recent periods.

Financial Leverage

The Financial Leverage ratio showed moderate fluctuations throughout the timeline. Initially close to 2.0, it decreased slightly during 2021 to reach lows near 1.73, signaling a minor reduction in the use of debt relative to equity. From 2022 onward, the leverage ratio began to increase again, eventually rising sharply to over 4.0 by early 2025. This rising leverage suggests an increased reliance on debt financing in recent quarters, potentially amplifying financial risk.

Return on Equity (ROE)

ROE demonstrated a marked decline over the same period. Early values were relatively stable and positive, fluctuating between roughly 15% to 18% until mid-2021. Subsequently, ROE decreased significantly, turning negative in mid-2022 and continuing to deteriorate sharply through 2024 and into 2025. By the first quarter of 2025, ROE reached an extreme negative value exceeding -200%, reflecting pronounced losses relative to shareholder equity and highlighting severe equity value erosion.

Overall Insights

The data indicate a weakening financial position over time. Profitability, both on asset and equity bases, showed initial strength but suffered pronounced declines beginning in 2022, with increases in losses through to 2025. At the same time, financial leverage climbed, particularly in the last periods, suggesting an increased dependency on debt that may exacerbate financial vulnerability. The combined trends of declining returns and rising leverage point to potential operational and financial stresses impacting overall company performance during the most recent quarters.

The financial performance over the reported periods exhibits notable fluctuations and a marked deterioration in key profitability metrics over time.

Net Profit Margin

The net profit margin initially demonstrates an upward trend, increasing from 13.22% in mid-2020 to a peak of 19.45% by mid-2021. This positive momentum reverses starting late 2021, with the margin declining sharply from 15.4% at year-end 2021 to significant negative values in subsequent quarters. By mid-2024, the margin has plummeted to nearly -70%, indicating substantial losses relative to revenue.

Asset Turnover

The asset turnover ratio exhibits a gradual decrease from 0.63 in mid-2020 to roughly 0.53 by mid-2021, reflecting a slight reduction in the efficiency with which assets generate revenue. A more pronounced drop occurs by mid-2022, with values falling to around 0.21. However, from late 2022 through mid-2025, the ratio shows a recovery trend, climbing back above 0.40 and reaching 0.61 in early 2025, suggesting an improvement in asset utilization in the latter periods.

Financial Leverage

Financial leverage remains relatively stable around 1.7 to 2.0 ratios during the early part of the timeline, with slight fluctuations. However, from early 2024, leverage increases sharply, peaking at 4.29 by early 2025. This indicates a marked increase in the use of debt or other liabilities relative to equity, amplifying financial risk.

Return on Equity (ROE)

ROE follows a pattern similar to net profit margin. It shows solid profitability initially, around the mid-teens percentage range through 2020 and 2021. From late 2021 onwards, ROE declines steadily, crossing into negative territory by mid-2022 and continuing to worsen significantly through mid-2025. The negative ROE reaching below -200% indicates severe erosion of shareholder value and ineffective management of equity capital during this period.

In summary, the data reveals a period of strong financial performance up to mid-2021, followed by a significant downturn in profitability and returns on equity. Although asset turnover recovers partially in later quarters, this improvement is insufficient to offset the impact of increased financial leverage and sustained losses. The increasing leverage combined with deteriorating profitability and negative returns suggests elevated financial risk and potential operational challenges in recent periods.

The analysis of the quarterly financial ratios reveals notable shifts in profitability, efficiency, and asset utilization over the observed periods.

Net Profit Margin

The net profit margin exhibits a declining trend throughout the timeline. Starting at 13.22% in mid-2020, it initially improved to a peak of 19.45% by June 2021. However, from that point onward, profitability sharply decreased, turning negative from June 2022 and worsening considerably to reach approximately -79.5% by the first quarter of 2025. This signifies increasing losses relative to revenue in recent periods, indicating potential cost management issues or declining revenue streams.

Asset Turnover

Asset turnover, representing the efficiency of utilizing assets to generate revenue, showed a gradual decrease from 0.63 in mid-2020 to a low of 0.21 by June 2022. Following this, a moderate recovery trend is evident, with the ratio improving to 0.61 by the first quarter of 2025. Despite the early decline in efficiency, the recent upward movement suggests efforts to better leverage asset base or restructure operations for enhanced revenue generation.

Return on Assets (ROA)

The ROA trend mirrors that of the net profit margin, reflecting declining asset profitability. It started at 8.32% in mid-2020, showing a peak around 10.34% in June 2021, followed by a steep decline entering negative territory in the second quarter of 2022. The reduction continues sharply, reaching nearly -48.79% by early 2025. This negative return indicates that the company incurred significant losses relative to its asset base, highlighting deteriorating operational performance.

Overall, the data reveals a company that experienced strong profitability and asset efficiency in early periods, followed by a marked downturn starting mid-2022. The sharp declines in net profit margin and ROA underscore sustainability challenges, while the partial recovery in asset turnover towards the end of the period reveals attempts to improve operational efficiency. Careful strategies addressing cost control and asset utilization may be critical to reversing negative profitability and achieving better financial health.