Texas Instruments Inc. (NASDAQ:TXN)

Return on Assets (ROA)

The Return on Assets showed a notable increase from 28.91% in March 2020 to a peak around 34.69% in September 2022. Following this peak, there was a progressive decline until March 2025, where it settled near 14.44%. This trend indicates a strong performance improvement in the early periods, followed by a sustained decrease, reflecting a diminishing efficiency in asset utilization over the latter periods.

Financial Leverage

Financial Leverage exhibited a general decline from 2.23 in March 2020 to its lowest point of approximately 1.75 by June 2022. After this low, it demonstrated a moderate upward trend, reaching around 2.13 by June 2025. The initial reduction suggests a strategic decrease in the reliance on debt or financial obligations, followed by a gradual increase indicating a cautious re-leveraging in recent periods.

Return on Equity (ROE)

Return on Equity followed a pattern similar to ROA, initially rising from 60.9% in March 2020 to a high near 61.52% in December 2022. Subsequently, ROE declined steadily reaching approximately 29.7% by March 2025. This decline indicates reduced profitability from shareholders' equity over time despite the early strong performance, aligning with the decrease in ROA and showing a potential erosion in overall profitability.

Overall Analysis

The combined analysis of ROA, ROE, and Financial Leverage points to a period of robust profitability and efficient asset use up until late 2022. Following this period, metrics show a consistent decline in profitability and asset efficiency, even as financial leverage slightly increased. This pattern may imply rising costs, lower margins, or challenges in maintaining earlier profit levels, coupled with a cautious increase in financial risk exposure.

The analysis of the financial ratios over the specified periods reveals notable trends across profitability, efficiency, leverage, and overall return on equity.

Net Profit Margin (%)

The net profit margin experienced a significant increase from the first available data point at 38.69% in March 2021 to a peak around 44.21% in December 2022. Subsequently, it shows a gradual decline, reaching approximately 30.23% by the end of June 2025. This pattern suggests an improvement in profitability until late 2022, followed by a steady erosion possibly due to increasing costs, pricing pressures, or other operational challenges.

Asset Turnover (ratio)

The asset turnover ratio indicates the efficiency with which assets generate revenue. It improved from 0.75 in March 2021 to a temporary high of 0.79 in September 2022. After this peak, asset turnover consistently decreased, falling to about 0.48 by June 2025. This downward trend points to declining asset utilization efficiency over the recent periods, which may reflect asset base growth outpacing revenue or diminishing sales effectiveness.

Financial Leverage (ratio)

Financial leverage ratios started from 2.23 in March 2020 and decreased steadily to about 1.85 in June 2021. Following this, leverage mildly fluctuated but generally increased, reaching approximately 2.13 by June 2025. This indicates a trend toward gradually higher leverage in the later periods, potentially signaling increased use of debt financing or other liabilities to support operations or growth.

Return on Equity (ROE) (%)

ROE was high in early periods, peaking near 61.52% in December 2022 after a series of stable values around 60%. From this peak, ROE declined steadily to 30.73% by June 2025. The decreasing ROE is consistent with the falling net profit margin and asset turnover, despite some increase in financial leverage. This overall decline suggests lower profitability and efficiency in generating shareholder returns over time.

In summary, the company's financial performance indicators display a period of improvement in profitability and efficiency culminating around late 2022, followed by a marked decline through mid-2025. The decreasing asset turnover and net profit margin have contributed significantly to the reduction in ROE, despite a modest rise in financial leverage in recent quarters.

The analysis of the quarterly financial ratios reveals significant trends in profitability, efficiency, and leverage over the observed periods.

Tax Burden

The tax burden ratio remained relatively stable, fluctuating slightly between 0.86 and 0.90. This suggests a consistent effective tax rate throughout the periods analyzed, with minor variations indicating steady tax management.

Interest Burden

The interest burden ratio demonstrated a gradual decline from approximately 0.98 down to 0.91 over the course of the periods. This decreasing trend indicates an increasing impact of interest expenses on earnings before taxes, suggesting either rising interest costs or relatively higher debt levels impacting earnings.

EBIT Margin

The EBIT margin showed an initial improvement, increasing from about 42.9% up to a peak of approximately 52.2%. However, from that peak, there was a consistent downward trend declining to around 37.1% by the last period. This pattern indicates that operating profitability first strengthened but then weakened considerably in later periods.

Asset Turnover

Asset turnover ratios were relatively stable initially, fluctuating from around 0.75 to 0.81, but then experienced a steady decline from 0.77 to 0.44, showing reduced efficiency in asset utilization. The midpoint saw a notable decrease which suggests that the company's ability to generate sales from its asset base diminished over time.

Financial Leverage

The financial leverage ratio showed initial variability, declining from about 2.23 to 1.85, followed by a gradual increase back to around 2.13. This suggests changes in the company's use of debt and equity, with a tendency toward increasing leverage in the later periods.

Return on Equity (ROE)

Return on equity exhibited a peak around 61.5% before entering a pronounced downward trajectory to approximately 30.7%. The decline reflects the combined effects of decreasing operating margins, lowering asset turnover, and the variations in leverage, ultimately resulting in diminished shareholder returns.

In summary, the company initially showed improvements in operating profitability and maintained efficient use of assets, but these trends reversed in the later quarters with declining margins and asset turnover. At the same time, increasing financial leverage and interest burdens may have constrained net performance, impacting overall return on equity, which substantially decreased across the periods analyzed.

The financial metrics exhibit distinct trends across the observed quarterly periods.

Net Profit Margin (%):

Starting from March 2021, the net profit margin demonstrated a general upward movement, peaking around December 2022 at approximately 44.21%. This was followed by a consistent decline through subsequent quarters, reaching about 30.23% by the last period in June 2025. The initial growth phase suggests improved operational efficiency or favorable market conditions, while the gradual decrease in the later periods may indicate rising costs, pricing pressures, or other adverse factors affecting profitability.

Asset Turnover (ratio):

The asset turnover ratio showed moderate fluctuations with an early increase from 0.75 in March 2021 to a high of 0.81 in September 2021. After this peak, it generally trended downwards to a low near 0.44 in December 2024 and March 2025. Interestingly, a slight recovery to 0.48 is visible in the final quarters. This pattern suggests that asset utilization efficiency improved initially but weakened over time, possibly due to slower sales growth relative to asset base expansion or increased capital investments.

Return on Assets (ROA) (%):

ROA rose from about 28.91% in March 2021 to a peak of approximately 34.69% in September 2022, reflecting strong profitability relative to assets during this period. Subsequently, it declined steadily to around 13.51% by March 2025, with a marginal rebound in June 2025. The decline in ROA mirrors trends observed in net profit margin and asset turnover, highlighting decreasing efficiency in generating returns from total assets over time.

Overall, the data reflects a period of improving profitability and efficiency up to late 2022, followed by a sustained downturn through mid-2025 in key financial ratios. This suggests that despite initial gains, challenges emerged that impacted profitability and asset utilization in recent periods.

The financial ratios exhibit several notable trends over the analyzed periods. The Tax Burden ratio remains relatively stable, fluctuating slightly around 0.86 to 0.90, indicating consistent tax efficiency throughout the intervals. The Interest Burden ratio, while initially steady near 0.97 to 0.98, demonstrates a gradual decline starting from the end of 2022, decreasing to 0.91 by mid-2025, which suggests an increasing interest expense burden over time.

The EBIT Margin shows a peak in the late 2021 period, reaching approximately 52.16%, before entering a steady declining trend down to about 37.12% by early 2025. This suggests that operating profitability has diminished significantly over the most recent periods despite previously strong performance.

Asset Turnover exhibits moderate variation with an upward trend through mid-2021 peaking near 0.81, followed by a decline to as low as 0.44 by late 2024, then a slight recovery toward 0.48 by mid-2025. This pattern indicates a decrease in the efficiency of using assets to generate revenue over the later periods, with slight improvement toward the end of the timeline.

Return on Assets (ROA) mirrors the patterns seen in EBIT Margin and Asset Turnover. ROA grows steadily from around 28.91% in early 2020 to a peak of 34.69% in late 2022, before a pronounced decline to approximately 14.43% by mid-2025. This drop reflects the combined effects of decreasing profitability and asset utilization efficiency, pointing to reduced overall effectiveness in generating returns from the company's assets over the recent years.

In summary, while tax efficiency remains stable, the increasing interest burden and declining operating margins and asset turnover contribute to a significant reduction in the return on assets in recent periods. This signals potential challenges in maintaining profitability and asset utilization efficiency moving forward.

Tax Burden

Stable around 0.86-0.90, indicating consistent tax impact.

Interest Burden

Decrease from ~0.98 to 0.91, indicating rising interest expenses or leverage effects.

EBIT Margin

Peaked near 52% in 2021, then declined steadily to ~37% by 2025, showing reduced operating profitability.

Asset Turnover

Ranged from 0.75 to 0.81 early on, dropped to about 0.44 in late 2024, with minor recovery to 0.48 by mid-2025, indicating lowered asset efficiency.

Return on Assets (ROA)

Increased to 34.69% in 2022 but dropped sharply to roughly 14.43% by mid-2025, reflecting decreased overall asset performance.

The financial data displays several key trends over the analyzed periods, particularly focusing on profitability and burden ratios. The tax burden ratio, starting from the first available data in March 31, 2020, remains relatively stable, fluctuating slightly but generally maintaining a range between 0.86 and 0.90. This suggests a consistent effective tax rate throughout the period with marginal improvement towards the later periods.

The interest burden ratio shows a gradual decline over time. Beginning at around 0.97 in early periods, it decreases steadily to 0.91 by June 30, 2025. This decreasing trend indicates a rising interest expense burden relative to earnings before interest and taxes, potentially reflecting increased leverage or higher interest expenses over time.

Concerning profitability margins, the EBIT margin exhibits a strong upward trend through the initial periods, rising from approximately 42.92% to a peak of around 52.16% by December 31, 2021. Following this peak, a gradual decline is noticeable, descending to roughly 37.12% by June 30, 2025. This pattern suggests that operating efficiency improved significantly before encountering downward pressures in later periods.

The net profit margin mirrors the general trajectory of the EBIT margin but lags slightly behind in terms of magnitude. Starting near 38.69%, it rises to a peak just above 44.21% and then steadily decreases to about 30.23% by June 30, 2025. The decline in net profit margin alongside the falling EBIT margin indicates that both operational and bottom-line profitability faced pressures over the latter years.

Overall, the data indicates that while the company experienced a period of increasing profitability and maintained stable tax expenses, the rising interest burden and subsequent downturn in margins suggest challenges impacting net profitability toward the latest reported periods.

Tax Burden Ratio

Stable with slight fluctuations, generally around 0.86 to 0.90, indicating consistent tax rates over time.

Interest Burden Ratio

Declining from about 0.97 to 0.91, suggesting increasing interest expenses or leverage.

EBIT Margin

Rising initially from approximately 42.92% to a peak of 52.16%, then declining to about 37.12%, reflecting changes in operating efficiency and margins.

Net Profit Margin

Increasing in the early periods from roughly 38.69% to 44.21% and subsequently decreasing to around 30.23%, evidencing net profitability trends consistent with changes in operating results and interest burdens.