Stock Analysis on Net
Stock Analysis on Net

Texas Instruments Inc. (NASDAQ:TXN)

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Adjustments to Financial Statements: Removal of Goodwill

Texas Instruments Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 32,348 27,207 24,676 19,351 18,018
Less: Goodwill 4,362 4,362 4,362 4,362 4,362
Total assets (adjusted) 27,986 22,845 20,314 14,989 13,656
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 16,897 14,577 13,333 9,187 8,907
Less: Goodwill 4,362 4,362 4,362 4,362 4,362
Stockholders’ equity (adjusted) 12,535 10,215 8,971 4,825 4,545

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Texas Instruments Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Texas Instruments Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Total Asset Turnover
Reported total asset turnover 0.54 0.74 0.74 0.75 0.80
Adjusted total asset turnover 0.63 0.88 0.90 0.96 1.05
Financial Leverage
Reported financial leverage 1.91 1.87 1.85 2.11 2.02
Adjusted financial leverage 2.23 2.24 2.26 3.11 3.00
Return on Equity (ROE)
Reported ROE 38.53% 60.02% 58.27% 60.90% 56.33%
Adjusted ROE 51.93% 85.65% 86.60% 115.96% 110.39%
Return on Assets (ROA)
Reported ROA 20.12% 32.16% 31.48% 28.91% 27.84%
Adjusted ROA 23.26% 38.30% 38.24% 37.33% 36.74%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Texas Instruments Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Texas Instruments Inc. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Texas Instruments Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Texas Instruments Inc. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Texas Instruments Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Revenue 17,519 20,028 18,344 14,461 14,383
Total assets 32,348 27,207 24,676 19,351 18,018
Activity Ratio
Total asset turnover1 0.54 0.74 0.74 0.75 0.80
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenue 17,519 20,028 18,344 14,461 14,383
Adjusted total assets 27,986 22,845 20,314 14,989 13,656
Activity Ratio
Adjusted total asset turnover2 0.63 0.88 0.90 0.96 1.05

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= 17,519 ÷ 32,348 = 0.54

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 17,519 ÷ 27,986 = 0.63

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Texas Instruments Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets 32,348 27,207 24,676 19,351 18,018
Stockholders’ equity 16,897 14,577 13,333 9,187 8,907
Solvency Ratio
Financial leverage1 1.91 1.87 1.85 2.11 2.02
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 27,986 22,845 20,314 14,989 13,656
Adjusted stockholders’ equity 12,535 10,215 8,971 4,825 4,545
Solvency Ratio
Adjusted financial leverage2 2.23 2.24 2.26 3.11 3.00

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= 32,348 ÷ 16,897 = 1.91

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 27,986 ÷ 12,535 = 2.23

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Texas Instruments Inc. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income 6,510 8,749 7,769 5,595 5,017
Stockholders’ equity 16,897 14,577 13,333 9,187 8,907
Profitability Ratio
ROE1 38.53% 60.02% 58.27% 60.90% 56.33%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income 6,510 8,749 7,769 5,595 5,017
Adjusted stockholders’ equity 12,535 10,215 8,971 4,825 4,545
Profitability Ratio
Adjusted ROE2 51.93% 85.65% 86.60% 115.96% 110.39%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 6,510 ÷ 16,897 = 38.53%

2 Adjusted ROE = 100 × Net income ÷ Adjusted stockholders’ equity
= 100 × 6,510 ÷ 12,535 = 51.93%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Texas Instruments Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income 6,510 8,749 7,769 5,595 5,017
Total assets 32,348 27,207 24,676 19,351 18,018
Profitability Ratio
ROA1 20.12% 32.16% 31.48% 28.91% 27.84%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income 6,510 8,749 7,769 5,595 5,017
Adjusted total assets 27,986 22,845 20,314 14,989 13,656
Profitability Ratio
Adjusted ROA2 23.26% 38.30% 38.24% 37.33% 36.74%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 6,510 ÷ 32,348 = 20.12%

2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 6,510 ÷ 27,986 = 23.26%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Texas Instruments Inc. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.