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

Return on Assets (ROA)

The ROA shows an initial increasing trend beginning in March 2020, with values rising from 8.17% to a peak of 10.34% in September 2021. Following this peak, the ROA declines steadily, turning negative starting in September 2022. The downward trend intensifies significantly from March 2024 onwards, plunging to -48.79% by March 2025. This pattern indicates a deterioration in asset efficiency and profitability over the latter periods.

Financial Leverage

Financial leverage fluctuates moderately around values close to 2.0 in the earlier periods, exhibiting slight decreases and recoveries until March 2023. From March 2024, a marked increase is observed, with financial leverage rising sharply to 4.29 by March 2025. This indicates an increased reliance on debt financing in the most recent periods.

Return on Equity (ROE)

ROE initially improves from March 2020, reaching a high of 18.03% in September 2021, which suggests strong profitability for equity holders during this period. Subsequently, ROE declines rapidly, becoming negative by September 2022 and worsening substantially thereafter. The decline culminates in an extreme negative figure of -209.52% by March 2025. This trend reflects a significant loss of shareholder value and deteriorating financial performance.

Overall Analysis

The financial indicators reveal a period of initial stability and growth in earnings and returns until late 2021, followed by a persistent decline in performance and profitability. The increasing financial leverage paired with decreasing ROA and ROE suggests rising financial risk and strain on profitability in recent periods, with the company facing substantial operational and financial challenges by the end of the observed timeframe.

Net Profit Margin

The net profit margin shows a positive trend initially, increasing from 13.09% in March 2020 to a peak of 19.45% in September 2021. Following this peak, the margin declines steadily, turning negative by December 2022 and worsening substantially to reach -79.5% by March 2025. This indicates a significant deterioration in profitability over the most recent periods.

Asset Turnover

Asset turnover starts at 0.62 in March 2020, with a gradual decline to 0.51 by December 2021. There is a sharp drop to 0.21 in June 2022, after which it recovers steadily to 0.61 by March 2025. This pattern suggests fluctuating efficiency in asset utilization, with a notable dip in mid-2022 followed by a recovery trend into 2025.

Financial Leverage

Financial leverage shows a moderate downward trend from 2.09 in June 2019 to about 1.72 by March 2022, indicating a reduction in reliance on debt or liabilities relative to equity. From this point, leverage remains relatively stable around 1.75 to 1.85 until early 2024, after which it abruptly rises to 4.29 by March 2025, suggesting a significant increase in financial risk or debt usage in the most recent period.

Return on Equity (ROE)

Return on equity follows a pattern similar to the net profit margin. It improves from 15.93% in March 2020 to 18.03% in September 2021, indicating strong shareholder returns. Subsequently, ROE declines sharply, becoming negative after September 2022 and plunging to -209.52% by March 2025. The steep negative ROE highlights severe losses and diminished shareholder value in the latest periods.

The analysis of the quarterly financial indicators reveals distinct trends and shifts over the observed periods. The three key metrics examined are Net Profit Margin, Asset Turnover, and Return on Assets (ROA).

Net Profit Margin (%)

The Net Profit Margin begins at a positive level around 13% in early 2020 and peaks near 19.45% in the third quarter of 2021. Following this peak, there is a clear and persistent downward trend, crossing into negative territory by the first quarter of 2023. The margin continues its decline, reaching approximately -79.5% by the first quarter of 2025. This significant reduction suggests increasing challenges in profitability, with losses deepening dramatically in recent periods.

Asset Turnover (ratio)

Asset Turnover ratios start at about 0.62 in mid-2020, followed by a gradual decline, dropping to lows around 0.21-0.25 between mid-2022 and late 2022. From early 2023 onwards, the ratio shows a recovery trend, increasing steadily and reaching approximately 0.61 by the first quarter of 2025. This pattern indicates an initial reduction in the efficiency of asset use to generate revenue, followed by a progressive improvement over the more recent quarters.

Return on Assets (ROA) (%)

ROA mirrors the behavior observed in Net Profit Margin, starting at about 8.17% in mid-2020 and rising to a peak near 10.34% in late 2021. Afterward, ROA declines sharply, turning negative by mid-2022. The negative trend intensifies substantially, with ROA falling to nearly -48.79% by early 2025. This indicates diminishing returns on asset investment, aligning with worsening profitability and reflecting a loss in asset-generated earnings.

Overall, the financial indicators highlight a period of strong profitability and efficient asset utilization until late 2021, followed by a marked deterioration in profit margins and returns on assets. However, asset turnover, after an initial decline, shows signs of recovery in the recent quarters, which could suggest efforts to improve operational efficiency despite ongoing profitability pressures.