Analysis of Investments
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Texas Instruments Inc. pages available for free this week:
- Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Price to Operating Profit (P/OP) since 2005
- Analysis of Revenues
- Aggregate Accruals
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Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Texas Instruments Inc., adjustment to net income
US$ in millions
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|---|
| Net income (as reported) | ||||||
| Add: Available-for-sale investments | ||||||
| Net income (adjusted) |
Based on: 10-K (reporting date: 2024-12-31), 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).
The analysis of net income figures over the five-year period reveals notable fluctuations. Reported net income increased significantly from 5,595 million US dollars in 2020 to a peak of 8,749 million US dollars in 2022, representing a strong growth trend during the initial years. However, this upward trajectory reversed starting in 2023, with net income declining to 6,510 million US dollars and further decreasing to 4,799 million US dollars by 2024.
The adjusted net income closely follows the pattern of the reported net income, with only marginal differences in specific years. For example, in 2022, adjusted net income is 8,746 million US dollars compared to the reported 8,749 million, and in 2023, adjusted net income is slightly higher at 6,515 million US dollars compared to the reported 6,510 million. These small deviations suggest limited adjustments related to non-operational or one-time items.
Overall, the data indicates robust growth in profitability from 2020 through 2022, followed by a pronounced decline in the subsequent two years. The alignment of adjusted figures with reported figures confirms that the core operational performance trends are accurately reflected in the reported net income metrics.
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Texas Instruments Inc., adjusted profitability ratios
Based on: 10-K (reporting date: 2024-12-31), 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).
- Net Profit Margin Trends
- The reported net profit margin exhibited a rising trend from 38.69% in 2020 to a peak of 43.68% in 2022. Subsequently, it declined notably to 37.16% in 2023 and further to 30.68% in 2024. The adjusted net profit margin closely mirrors this pattern, indicating consistency between reported and adjusted figures and suggesting no significant one-time adjustments impacting profitability margins during the periods assessed.
- Return on Equity (ROE) Patterns
- The reported ROE remained relatively high from 2020 to 2022, fluctuating between 58.27% and 60.9%, showing strong returns on shareholder equity. From 2023 onward, ROE decreased substantially to 38.53% and further to 28.39% in 2024. Adjusted ROE figures are almost identical, indicating adjustments had minimal impact on the equity returns reported. This decline signals a reduction in the company’s effectiveness in generating earnings from shareholders' equity in the latter periods.
- Return on Assets (ROA) Developments
- Reported ROA increased from 28.91% in 2020 to 32.16% in 2022, representing improved asset utilization and profitability. However, a sharp decline followed, with ROA falling to 20.12% in 2023 and further dipping to 13.51% in 2024. The adjusted ROA mirrors the reported figures closely, indicating no significant adjustments affecting asset-based returns. The decline in ROA aligns with reduced profitability margins and signals diminishing efficiency in using assets to generate net income.
- Overall Financial Performance Insights
- The company demonstrated strong profitability and returns on equity and assets through 2022, followed by a marked downturn in 2023 and 2024. The consistent alignment between reported and adjusted data suggests that the declines reflect underlying operating performance rather than extraordinary or one-off items. The downward trend across key profitability and efficiency ratios in the final two years may reflect macroeconomic challenges, competitive pressures, or operational issues impacting the company’s financial health.
Texas Instruments Inc., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2024-12-31), 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).
2024 Calculations
1 Net profit margin = 100 × Net income ÷ Revenue
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × ÷ =
- Net Income Trends
- The reported net income demonstrated a strong upward trend from 2020 to 2022, increasing from 5595 million US dollars in 2020 to a peak of 8749 million US dollars in 2022. However, this was followed by a notable decline in the subsequent years, dropping to 6510 million in 2023 and further to 4799 million in 2024. The adjusted net income closely mirrors this pattern, indicating that adjustments had minimal impact on overall income trends.
- Profit Margin Trends
- The reported net profit margin showed a consistent increase from 38.69% in 2020, reaching its highest point at 43.68% in 2022. Afterward, it experienced a decline, decreasing to 37.16% in 2023 and further to 30.68% in 2024. The adjusted net profit margin followed a similar trend with marginal differences, indicating that underlying profitability followed the same trajectory after removing adjustments.
- Overall Analysis
- The data indicates a period of strong financial performance culminating in 2022, followed by a period of weakening profitability and net income in the subsequent two years. The close alignment between reported and adjusted figures suggests that the company’s reported results are reliable without significant distortion from one-time items or adjustments. The declining profit margins in 2023 and 2024 suggest potential challenges impacting cost efficiency or revenue growth, warranting further investigation into operational or market factors.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2024-12-31), 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).
2024 Calculations
1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income ÷ Stockholders’ equity
= 100 × ÷ =
The data reveals notable fluctuations in net income and return on equity (ROE) over the five-year period examined.
- Net Income
- Reported net income showed a general upward trend initially, rising from 5,595 million US dollars in 2020 to a peak of 8,749 million in 2022. However, a decline is observed thereafter, with net income decreasing to 6,510 million in 2023 and further dropping to 4,799 million in 2024. The adjusted net income mirrors this pattern closely, indicating that adjustments have minimal impact on reported earnings during this timeframe.
- Return on Equity (ROE)
- ROE follows a pattern similar to net income. The reported ROE registered strong figures above 58% from 2020 through 2022, reaching a maximum of 60.9% in 2020 and maintaining slightly above 60% in 2022. However, a significant reduction is evident starting in 2023, where ROE fell to approximately 38.5%, followed by another decline to 28.39% in 2024. Adjusted ROE values align almost identically with reported ROE, confirming the consistency between reported and adjusted results.
Overall, the analysis highlights a strong financial performance with high profitability and efficiency from 2020 to 2022, succeeded by a pronounced decline in both profitability and equity returns over the last two years. This downward trend in 2023 and 2024 warrants further investigation into underlying operational or market factors affecting earnings and equity efficiency.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2024-12-31), 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).
2024 Calculations
1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × ÷ =
- Net Income Trends
- The net income shows an overall increase from 2020 to 2022, rising from 5,595 million US dollars in 2020 to 8,749 million US dollars in 2022. However, this upward trend reverses in the subsequent years, with net income declining to 6,510 million US dollars in 2023 and further decreasing to 4,799 million US dollars by 2024. The adjusted net income closely follows the reported figures, indicating minimal discrepancies between reported and adjusted values.
- Return on Assets (ROA) Trends
- The reported ROA displays a strong improvement from 28.91% in 2020 to a peak of 32.16% in 2022, reflecting enhanced profitability relative to assets during this period. Nevertheless, there is a pronounced decline thereafter, with ROA dropping to 20.12% in 2023 and further to 13.51% by 2024. The adjusted ROA mirrors the reported ROA values precisely, confirming consistency between reported and adjusted measurements.
- Overall Insights
- The data illustrates a phase of growth and increasing efficiency through 2022, marked by rising net income and ROA. The subsequent sharp declines in both metrics over the last two years suggest decreasing profitability and asset utilization efficiency. Given the parallel trends in reported and adjusted figures, the financial results appear reliable and not substantially affected by extraordinary adjustments or accounting changes.