Texas Instruments Inc. (NASDAQ:TXN)

Return on Assets (ROA)

The ROA displays an overall declining trend from the earliest available data point in March 2020 through to March 2025. Initially, the ROA was strong, reaching values above 30% during the period from March 2021 to December 2022, peaking at 34.69% in September 2022. After this peak, the ROA gradually declines each quarter, dropping steadily to 14.44% by March 2025. This downward trajectory indicates a reduction in asset efficiency or profitability over time.

Financial Leverage

Financial leverage ratios show modest fluctuations throughout the observed periods but generally remain within the range of approximately 1.75 to 2.28. Starting at 2.23 in March 2020, leverage decreases toward mid-2021, hitting lows near 1.75 in mid-2022. Subsequently, there is a subtle upward trend with leverage ratios rising back to around 2.06 by March 2025. These variations suggest relatively stable capital structure management with slight adjustments possibly aimed at optimizing financial risk and funding costs.

Return on Equity (ROE)

ROE exhibits a pattern similar to that of ROA, starting from high levels around 60% in early 2021 and maintaining this elevated performance through late 2022. The ROE peaks slightly above 61% before initiating a consistent decline, reaching around 29.7% by March 2025. This significant decrease over time signals reduced returns to equity holders and may reflect challenges in maintaining profit margins or increased equity base without corresponding profit growth.

Overall Analysis

Across the observed periods, the company demonstrates a strong performance in asset utilization and equity returns in the early years, followed by a clear downward trend through to 2025. Financial leverage remains fairly steady, suggesting that changes in ROA and ROE are more likely driven by operational performance rather than shifts in capital structure. The decrease in profitability ratios could be indicative of increased expenses, pricing pressures, or market competition affecting earnings over time.

Net Profit Margin

The net profit margin demonstrated a rising trend from March 31, 2021, reaching a peak of 44.21% at the end of 2022. This increase suggests improved profitability during this period. However, from early 2023 onwards, the margin has exhibited a consistent decline, falling to 30.36% by March 31, 2025. This downward movement indicates a reduction in the company's profitability over the most recent periods analyzed.

Asset Turnover

Asset turnover ratios remained relatively stable around the mid-to-high 0.7 range between March 2021 and December 2022, with a slight increase noted during some quarters. However, starting from March 2023, asset turnover began to decline steadily, reaching 0.44 by September 2024 before a minor recovery to 0.48 by March 2025. This trend points to a decreasing efficiency in the use of assets to generate revenue during the latest periods.

Financial Leverage

Financial leverage ratios showed moderate fluctuation within a narrow band throughout the entire time frame. Starting at 2.23 in early 2020, the ratio decreased to around 1.85 by mid-2021, remaining relatively low until early 2023. Subsequently, a gradual increase is observable, rising to about 2.10 by the end of 2024 and slightly tapering to 2.06 by March 2025. This pattern indicates a modest increase in the use of debt or financial obligations relative to equity in the latter periods.

Return on Equity (ROE)

ROE sustained a high and stable level through 2021 and 2022, hovering around 60-61%. Beginning in early 2023, ROE experienced a sharp decline, dropping below 50% by mid-2023 and continuing downward to approximately 29.7% by March 2025. The decline aligns with lower net profit margins and reduced asset turnover, reflecting a diminishing capacity to generate returns on shareholders' equity over recent periods.

Overall Summary

The data reveals a period of strong profitability and operational efficiency in 2021 and 2022, followed by a marked deterioration across key performance indicators from 2023 onwards. The decrease in net profit margin and asset turnover suggests challenges in maintaining profit levels and asset usage effectiveness. Despite an increase in financial leverage in the later periods, this does not appear to have offset the declining ROE, which has almost halved from its earlier high levels. These trends highlight potential pressures on profitability and efficiency that may require strategic attention moving forward.

Tax Burden

The tax burden ratio remains relatively stable over the analyzed periods from March 31, 2021, through March 31, 2025. It fluctuates slightly within a narrow range, mostly between 0.86 and 0.90, indicating consistent tax expense impact relative to pre-tax income.

Interest Burden

This ratio shows a gradual but clear declining trend from 0.97 in March 31, 2021, to 0.91 by March 31, 2025. This suggests a steady increase in interest expense relative to earnings before interest and taxes, implying a potentially rising cost of debt or increased leverage burden over time.

EBIT Margin

The EBIT margin displays an initial increasing trend, peaking around mid-2022 at above 52%, followed by a consistent decline through to March 31, 2025, reaching approximately 37%. This indicates that operating profitability improved initially but then weakened significantly in the latter periods.

Asset Turnover

The asset turnover ratio shows modest fluctuations, starting around 0.75 in early 2021 and gradually declining to a low of 0.44 by late 2024, with a slight recovery to 0.48 by March 2025. This decline suggests a reduced efficiency in generating revenue from assets over time, although the last period shows a minor improvement.

Financial Leverage

Financial leverage decreases from 2.23 in March 31, 2020 to around 1.85 by mid-2021, showing a trend of deleveraging. Subsequently, leverage fluctuates moderately but generally increases back towards 2.06 by March 31, 2025, indicating a renewed use of debt or equity financing to support asset growth or operations.

Return on Equity (ROE)

ROE starts very high in early 2021, near 61%, then follows a consistent downward trajectory, reaching approximately 29.7% by March 31, 2025. This decline in ROE is influenced by decreasing EBIT margins and asset turnover, partially offset by fluctuating financial leverage. Overall, the company's ability to generate shareholder returns has materially decreased over the analyzed period.

Net Profit Margin

The net profit margin demonstrates a notable upward trend beginning in the first quarter of 2021, rising from 38.69% to peak at 44.21% by the fourth quarter of 2022. This reflects improved profitability during this timeframe. However, following this peak, there is a consistent decline observed through to the first quarter of 2025, where the margin decreases to 30.36%. This downward trend suggests increasing cost pressures or diminishing revenue efficiency impacting profit levels in recent periods.

Asset Turnover

Asset turnover starts at 0.75 in the first quarter of 2021 and shows modest fluctuations, reaching a peak of 0.81 in the third quarter of 2021. Subsequently, there is a gradual decline, dropping to a low of 0.44 in the third quarter of 2024. A slight recovery to 0.48 is seen by the first quarter of 2025. The downward trend in asset turnover implies a reduced efficiency in generating sales from assets over the longer term, though the recent uptick may indicate early signs of operational improvement.

Return on Assets (ROA)

The return on assets exhibits growth from 28.91% at the beginning of 2021 to a high of 34.69% in the third quarter of 2022, reflecting strong profitability in relation to asset base. Following this peak, ROA declines steadily to 13.51% by the third quarter of 2024, with a minor rebound to 14.44% in the first quarter of 2025. This pattern suggests that the company’s ability to generate earnings from its assets weakened significantly after 2022, aligning with the observed downward trends in net profit margin and asset turnover.

Tax Burden

The tax burden ratio remained relatively stable over the observed periods, fluctuating slightly around 0.86 to 0.90. Beginning at 0.93 in early 2021, it showed a modest decline to approximately 0.86 during 2022, followed by a gradual increase reaching 0.90 by the first quarter of 2025. This indicates consistent tax expense management relative to pre-tax income over time.

Interest Burden

The interest burden displayed a gradual decreasing trend, starting near 0.97 in early 2021 and declining steadily to 0.91 by early 2025. This trend suggests a modest increase in interest expenses or a relative decrease in operating income before interest, slightly reducing the portion of EBIT available after interest charges.

EBIT Margin

The EBIT margin exhibited an upward trajectory from approximately 43% in the first quarter of 2021, peaking at about 52% in late 2021 and early 2022. Post this peak, a downward trend ensued, with margins declining consistently to roughly 37% by early 2025. This pattern reflects an initial improvement in operating profitability followed by a weakening performance in later periods.

Asset Turnover

Asset turnover ratio showed minor fluctuations with a peak close to 0.81 in late 2020, but overall displayed a declining trend thereafter. From a value of approximately 0.75 in early 2021, it reduced steadily to about 0.44 by late 2024, before recording a slight increase to 0.48 by early 2025. This trend indicates decreasing efficiency in using assets to generate revenue over most of the analyzed period, with a small sign of recovery towards the end.

Return on Assets (ROA)

The ROA followed a pronounced decline throughout the period. Initially around 29% in early 2021, it increased marginally to near 35% in late 2022 but then decreased consistently to approximately 14% by early 2025. The overall reduction in ROA highlights diminishing effectiveness in generating net income from total assets, largely influenced by the declining EBIT margin and asset turnover.

The financial ratios analyzed over the reported periods reveal several notable trends in profitability and financial efficiency.

Tax Burden

The tax burden ratio remains relatively stable from the earliest available figure in March 2021 through March 2025. Values oscillate narrowly around 0.86 to 0.90, indicating a consistent tax environment or effective tax management minimizing fluctuations.

Interest Burden

This ratio shows a gradual declining trend over time. Starting close to 0.97 in early 2021, it decreases steadily to 0.91 by March 2025. The lower interest burden suggests a progressive reduction in interest expenses relative to earnings before interest and taxes (EBIT), which could indicate improved debt management or lower interest rates affecting the company's financing costs.

EBIT Margin

The EBIT margin exhibits a rising trend from 42.92% in March 2021 to a peak above 52% around late 2021 and early 2022, signaling enhanced operational efficiency or stronger pricing power during this period. However, following this peak, there is a clear downward trend through to March 2025, dropping to approximately 37.11%. This decline may reflect increasing costs, pricing pressures, or changes in sales mix impacting operational profitability negatively over time.

Net Profit Margin

A similar pattern is apparent in the net profit margin. Starting around 38.69% in March 2021, it rises moderately to a peak near 44.21% by late 2022, indicating strong bottom-line profitability possibly driven by high operational margins and controlled financial expenses. Subsequently, the margin declines steadily to 30.36% by March 2025, mirroring the EBIT margin trend and suggesting either increased expenses, higher effective tax rates, or other factors affecting net profitability.

Overall, the data reflects an initial period of improving profitability and operational leverage, followed by a marked downward trend in margins. The steady tax burden and declining interest burden ratios further suggest stable fiscal and financial management, although the erosion in earnings margins highlights emerging challenges in maintaining cost controls or revenue growth at similar levels in recent years.