Texas Instruments Inc. (NASDAQ:TXN)

The financial metrics presented demonstrate several notable trends between 2021 and 2025. Generally, asset efficiency and profitability metrics decreased over the period, while leverage ratios increased. The differences between reported and adjusted figures are consistently small, suggesting the adjustments do not materially alter the overall assessment.

Asset Turnover

Both the reported and adjusted total asset turnover ratios exhibit a declining trend from 0.74 in 2021 and 2022 to 0.44 in 2024, before a slight recovery to 0.51 in 2025. This indicates decreasing efficiency in utilizing assets to generate revenue. The adjusted figures remain very close to the reported values.

Liquidity

The reported and adjusted current ratios show a gradual decrease from 5.33 in 2021 to 4.12 in 2024, followed by a modest increase to 4.35 in 2025. While remaining above 4, the declining trend suggests a potential weakening in short-term liquidity. The adjustments have a negligible impact on this ratio.

Leverage

Debt to equity and debt to capital ratios consistently increased throughout the period. Reported debt to equity rose from 0.58 in 2021 to 0.86 in 2025, while the adjusted ratio increased from 0.62 to 0.96. A similar pattern is observed for debt to capital, moving from 0.37 to 0.49. These increases indicate a growing reliance on debt financing. Financial leverage also increased, from 1.85 in 2021 to 2.19 in 2025, confirming the higher degree of financial risk.

Profitability

Net profit margin experienced a significant decline, decreasing from 42.35% in 2021 to 28.28% in 2025. Both reported and adjusted figures show this downward trend. Return on equity (ROE) followed a similar pattern, falling from 58.27% to 30.73%. Return on assets (ROA) also decreased substantially, from 31.48% to 14.46%. These declines suggest a diminishing ability to generate profits from both equity and assets.

In summary, the period under review is characterized by decreasing asset efficiency, increasing financial leverage, and declining profitability. The adjustments made to the financial metrics do not significantly alter these observed trends.

The reported and adjusted total asset turnover ratios exhibit similar trends over the five-year period. Initially, the ratios remain stable before declining and showing signs of recovery. Revenue demonstrates fluctuations, while total assets generally increase before a slight decrease in the most recent year. The adjusted total asset turnover provides a marginally different perspective compared to the reported ratio, but the overall patterns remain consistent.

Revenue Trend

Revenue increased from US$18,344 million in 2021 to US$20,028 million in 2022, representing a growth of approximately 9.2%. A subsequent decrease to US$17,519 million occurred in 2023, followed by a further decline to US$15,641 million in 2024. Revenue partially recovered in 2025, reaching US$17,682 million.

Total Asset Trend

Total assets increased consistently from US$24,676 million in 2021 to US$35,509 million in 2024. However, a slight decrease to US$34,585 million was observed in 2025. Adjusted total assets follow a similar pattern, increasing from US$24,421 million in 2021 to US$34,594 million in 2024, and then decreasing to US$33,640 million in 2025.

Reported Total Asset Turnover

The reported total asset turnover ratio remained relatively stable at 0.74 in both 2021 and 2022. A decline was observed in 2023, falling to 0.54, and continued in 2024, reaching 0.44. The ratio showed a modest recovery in 2025, increasing to 0.51.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio mirrored the trend of the reported ratio, holding steady at 0.75 in 2021 and 2022. It decreased to 0.55 in 2023 and further to 0.45 in 2024. A slight increase to 0.53 was noted in 2025. The difference between the reported and adjusted ratios is minimal across all periods.

The concurrent decline in both revenue and the asset turnover ratios in 2023 and 2024 suggests a potential decrease in the efficiency with which assets are being utilized to generate sales. The partial recovery in 2025, indicated by the increase in both revenue and the asset turnover ratio, may signal a stabilization or improvement in operational efficiency. The consistency between the reported and adjusted ratios suggests that the adjustments made to total assets do not significantly alter the overall interpretation of asset utilization.

The adjusted current ratio exhibits a generally declining trend over the five-year period, followed by a slight recovery in the most recent year. While the reported and adjusted current ratios are identical across all periods, indicating no adjustments were made to the current asset calculation, the overall movement warrants attention. The ratio decreased from 5.33 in 2021 to 4.13 in 2024 before increasing marginally to 4.36 in 2025.

Current Ratio Trend

From 2021 to 2024, the adjusted current ratio experienced a consistent decrease. This suggests a relative weakening in the company’s ability to cover its short-term liabilities with its short-term assets. The decline from 5.33 to 4.13 represents a substantial reduction in liquidity coverage. The subsequent increase to 4.36 in 2025 offers a modest improvement, but the ratio remains below the level observed in 2021.

Magnitude of Change

The largest year-over-year decrease occurred between 2022 and 2023, with a decline of 0.15. The decrease from 2023 to 2024 was also significant, at 0.42. The increase from 2024 to 2025 was minimal, at 0.01, suggesting the improvement may not be substantial.

Underlying Components

Current assets fluctuated over the period, increasing from US$13,685 million in 2021 to US$15,122 million in 2023, then decreasing to US$13,750 million in 2025. Current liabilities consistently increased from US$2,569 million in 2021 to US$3,643 million in 2024, before decreasing to US$3,159 million in 2025. The combined effect of these movements contributed to the observed trend in the current ratio.

The consistency between the reported and adjusted current ratios indicates that the company’s current asset valuation does not require adjustments based on any specific accounting considerations. However, the overall downward trend in the ratio, despite the identical values, suggests a potential need for monitoring liquidity management practices.

The adjusted debt to equity ratio for the observed period demonstrates a consistent upward trend. Total debt increased steadily from US$8,206 million in 2021 to US$14,779 million in 2025. Simultaneously, adjusted stockholders’ equity experienced growth, but at a slower pace, rising from US$13,170 million in 2021 to US$15,394 million in 2025. This differential growth in debt versus equity is the primary driver of the increasing ratio.

Adjusted Debt to Equity Ratio - Overall Trend

The adjusted debt to equity ratio rose from 0.62 in 2021 to 0.96 in 2025. This indicates a growing reliance on debt financing relative to equity financing over the five-year period. The increase appears to be accelerating, with larger absolute changes in the ratio observed in later years.

Year-over-Year Changes

From 2021 to 2022, the adjusted debt to equity ratio increased from 0.62 to 0.65, a relatively modest increase. The period from 2022 to 2023 saw a more substantial increase to 0.73. The largest year-over-year increases occurred between 2023 and 2024 (to 0.90) and 2024 and 2025 (to 0.96), suggesting an increased appetite or need for debt financing in recent periods.

Equity Growth

While stockholders’ equity increased overall, the rate of growth slowed considerably between 2023 and 2025. Equity grew by US$2,319 million between 2021 and 2023, but only US$879 million between 2023 and 2025. This deceleration in equity growth, coupled with continued debt accumulation, contributed significantly to the rising adjusted debt to equity ratio.

The consistent increase in the adjusted debt to equity ratio warrants further investigation. While some level of debt financing is typical, a sustained upward trend could indicate increased financial risk. The slowing growth of equity relative to debt suggests a potential shift in the company’s capital structure.

The information presents a five-year trend of debt and capital figures, culminating in adjusted debt-to-capital ratios. Total debt and total capital both demonstrate a consistent upward trajectory from 2021 through 2024, with a slight moderation in growth for both in 2025. The reported debt-to-capital ratio exhibits a steady increase over the period, while the adjusted debt-to-capital ratio shows a similar, though slightly more pronounced, upward trend.

Total Debt

Total debt increased from US$7,741 million in 2021 to US$14,048 million in 2025, representing a roughly 81.4% increase over the five-year period. The largest single-year increase occurred between 2022 and 2023, with an addition of US$2,488 million. Growth slowed in 2025, adding only US$72 million.

Total Capital

Total capital also increased consistently, moving from US$21,074 million in 2021 to US$30,321 million in 2025, a 43.9% increase. Similar to debt, the most significant growth was observed between 2022 and 2023, with an increase of US$4,808 million. Capital growth also decelerated in 2025, increasing by only US$158 million.

Reported Debt to Capital

The reported debt-to-capital ratio rose from 0.37 in 2021 to 0.46 in 2025. This indicates a growing proportion of debt financing relative to capital. The increase was gradual, with yearly increases ranging from 0.00 to 0.01, except for the 2023-2024 period which saw an increase of 0.05.

Adjusted Total Debt

Adjusted total debt followed a similar pattern to total debt, increasing from US$8,206 million in 2021 to US$14,779 million in 2025, a 79.9% increase. The largest single-year increase occurred between 2022 and 2023, with an addition of US$2,635 million. Growth slowed in 2025, adding only US$71 million.

Adjusted Total Capital

Adjusted total capital increased from US$21,376 million in 2021 to US$30,173 million in 2025, a 41.1% increase. The most significant growth was observed between 2022 and 2023, with an increase of US$4,661 million. Capital growth also decelerated in 2025, increasing by only US$95 million.

Adjusted Debt to Capital

The adjusted debt-to-capital ratio increased from 0.38 in 2021 to 0.49 in 2025. This represents a more substantial increase than the reported ratio, suggesting the adjustments to debt and capital have a notable impact on the leverage metric. The largest single-year increase occurred between 2023 and 2024, with an increase of 0.05.

In summary, both the reported and adjusted debt-to-capital ratios indicate increasing financial leverage over the observed period. The adjusted ratio consistently exceeds the reported ratio, suggesting the adjustments applied are increasing the calculated leverage. The rate of increase in both debt and capital slowed in 2025, which resulted in a smaller increase in both ratios during that year.

An examination of the financial information reveals trends in both reported and adjusted financial leverage alongside associated balance sheet components over a five-year period. Total assets generally increased from 2021 to 2024, with a slight decrease observed in 2025. Stockholders’ equity exhibited a similar pattern of growth until 2024, followed by a decline in the most recent year.

Total Assets

Total assets increased from US$24,676 million in 2021 to US$35,509 million in 2024, representing a compound annual growth rate of approximately 12.8%. A decrease to US$34,585 million was noted in 2025. The adjusted total assets mirrored this trend, moving from US$24,421 million to US$34,594 million over the same period, with a similar decrease in 2025.

Stockholders’ Equity

Stockholders’ equity increased from US$13,333 million in 2021 to US$16,903 million in 2024, indicating a compound annual growth rate of roughly 8.1%. A reduction to US$16,273 million was observed in 2025. Adjusted stockholders’ equity followed a comparable trajectory, rising from US$13,170 million to US$16,041 million between 2021 and 2024, and then decreasing to US$15,394 million in 2025.

Reported Financial Leverage

Reported financial leverage demonstrated an increasing trend, rising from 1.85 in 2021 to 2.10 in 2024. This indicates a growing proportion of assets financed by debt or other non-equity sources. The ratio increased slightly to 2.13 in 2025.

Adjusted Financial Leverage

Adjusted financial leverage exhibited a similar upward trend to the reported leverage, increasing from 1.85 in 2021 to 2.16 in 2024. A further increase to 2.19 was recorded in 2025. The adjusted leverage values are consistently identical to the reported leverage values throughout the observed period, suggesting the adjustments made do not materially impact the overall leverage calculation.

The consistent increase in both reported and adjusted financial leverage, coupled with the slight decline in stockholders’ equity in 2025, suggests a potential shift in the company’s capital structure towards greater reliance on external financing. The adjustments to total assets and equity do not appear to significantly alter the overall leverage picture.

The adjusted net profit margin exhibited a generally declining trend over the five-year period. While initially strong, profitability metrics decreased consistently, with a slight stabilization in the most recent year presented.

Adjusted Net Profit Margin - Overall Trend

The adjusted net profit margin began at 43.45% in 2021 and decreased to 28.49% in 2025. This represents a total decline of 14.96 percentage points over the period. The rate of decline appeared to moderate between 2024 and 2025.

Adjusted Net Profit Margin - Year-over-Year Changes

From 2021 to 2022, the adjusted net profit margin experienced a slight decrease, moving from 43.45% to 42.25%, a reduction of 1.20 percentage points. A more substantial decrease occurred between 2022 and 2023, with the margin falling to 35.75%, representing a decline of 6.50 percentage points. The largest year-over-year decrease was observed from 2023 to 2024, where the margin dropped by 6.96 percentage points to 29.79%. The decrease from 2024 to 2025 was comparatively smaller, at 1.30 percentage points, resulting in a final margin of 28.49%.

Relationship to Revenue

Revenue increased from US$18,344 million in 2021 to US$20,028 million in 2022, then decreased to US$17,519 million in 2023 and further to US$15,641 million in 2024. Revenue showed a recovery in 2025, reaching US$17,682 million. Despite the revenue recovery in 2025, the adjusted net profit margin did not return to earlier levels, suggesting factors beyond revenue volume influenced profitability.

Relationship to Adjusted Net Income

Adjusted net income generally followed the trend of the adjusted net profit margin, decreasing from US$7,971 million in 2021 to US$5,038 million in 2025. The decline in net income contributed to the observed decrease in the profit margin. While net income decreased, it remained relatively stable between 2024 and 2025.

The consistent decline in the adjusted net profit margin warrants further investigation to determine the underlying causes. Potential factors could include increased operating expenses, changes in product mix, or shifts in pricing strategies. The stabilization observed in 2025, despite the revenue increase, suggests that cost management or other efficiency improvements may have partially offset the ongoing pressures on profitability.

The adjusted return on equity (ROE) exhibited fluctuations over the five-year period. While initially strong, the metric experienced a decline before showing signs of recovery. A detailed examination of the components and trends is presented below.

Overall Trend

The adjusted ROE began at 60.52% in 2021, decreased to 38.62% in 2023, and then partially recovered to 32.73% in 2025. This indicates a period of diminished profitability relative to equity, followed by a modest improvement in recent years.

Adjusted Net Income

Adjusted net income decreased from US$7,971 million in 2021 to US$4,659 million in 2024, contributing to the decline in adjusted ROE. A slight increase to US$5,038 million was observed in 2025, partially offsetting the prior decrease.

Adjusted Stockholders’ Equity

Adjusted stockholders’ equity generally increased from US$13,170 million in 2021 to US$16,219 million in 2023. However, it then decreased to US$15,394 million in 2025. This suggests that while equity initially grew, recent periods have seen a reduction in the equity base.

Comparison to Reported ROE

The adjusted ROE values are consistently close to the reported ROE values across all years. The differences between the two metrics are minimal, suggesting that adjustments made to net income and stockholders’ equity have a limited impact on the overall ROE calculation.

Year-over-Year Changes

From 2021 to 2022, adjusted ROE decreased slightly from 60.52% to 59.66%. A more substantial decrease occurred between 2022 and 2023, with adjusted ROE falling to 38.62%. The period from 2024 to 2025 showed a recovery, with adjusted ROE increasing from 29.04% to 32.73%.

In summary, the adjusted ROE experienced a period of decline followed by a partial recovery. The fluctuations in both adjusted net income and adjusted stockholders’ equity contributed to these changes. The consistency between reported and adjusted ROE suggests that the adjustments applied do not fundamentally alter the overall profitability picture.

The adjusted return on assets (ROA) exhibited a fluctuating pattern over the five-year period. Initial values were strong, followed by a decline, and a slight recovery in the most recent year presented.

Overall Trend

From 2021 to 2023, the adjusted ROA experienced a decrease, followed by stabilization and a modest increase from 2023 to 2025. The highest adjusted ROA was recorded in 2021 at 32.64%, while the lowest was observed in 2023 at 19.82%.

Adjusted ROA - Year-over-Year Changes

A decrease in adjusted ROA was observed from 2021 (32.64%) to 2022 (31.63%), representing a decline of approximately 1.01 percentage points. A more substantial decrease occurred between 2022 and 2023, with the adjusted ROA falling to 19.82%, a reduction of 11.81 percentage points. From 2023 to 2024, the adjusted ROA continued to decline, albeit at a slower pace, decreasing to 13.47%. Finally, a slight increase was noted from 2024 to 2025, with the adjusted ROA reaching 14.98%, an improvement of 1.51 percentage points.

Relationship to Adjusted Net Income and Adjusted Total Assets

The decline in adjusted ROA from 2021 to 2023 appears to be influenced by both adjusted net income and adjusted total assets. While adjusted net income decreased over this period, adjusted total assets increased significantly. The combined effect of these changes resulted in a lower adjusted ROA. The stabilization and slight recovery in 2024 and 2025 correlate with a slower growth rate in adjusted total assets and a modest increase in adjusted net income.

The adjusted ROA generally mirrored the trend of the reported ROA, suggesting that the adjustments made to net income and total assets did not fundamentally alter the overall profitability relative to asset base. However, the adjusted figures provide a potentially more refined view of performance by accounting for specific items not reflected in the reported numbers.