Texas Instruments Inc. (NASDAQ:TXN)

The analysis of the financial ratios over the presented periods reveals several notable trends regarding the company's capital structure and ability to cover interest expenses.

Debt to Equity Ratio

This ratio displays a fluctuating but generally increasing trend. Beginning at 0.61 in March 2021, it declines slightly mid-year but starts to climb from early 2023, reaching a peak of 0.86 by June 2025, before a minor reduction to 0.84 in the last period. This indicates a gradual increase in reliance on debt relative to equity over the recent years.

Debt to Capital Ratio

The debt to capital ratio tracks similarly to the debt to equity ratio, exhibiting a gradual increase over the timeline. Starting at 0.38 in March 2021, it dips slightly around mid-2022 but rises consistently thereafter, peaking at 0.46 from March 2024 onwards. This signifies a growing proportion of debt within the total capital employed.

Debt to Assets Ratio

The debt to assets ratio also follows an upward trend, starting at 0.32 in March 2021, then stabilizing around 0.31 through early 2022, before increasing steadily and reaching 0.40 by mid-2024, maintaining this level towards mid-2025. This pattern suggests more leverage being applied relative to the company’s asset base.

Financial Leverage

The financial leverage ratio shows moderate variation but an overall increasing trend. From 1.93 in March 2021, it decreases slightly in mid-2022 but rises again, surpassing previous levels and peaking at 2.13 in June 2025. This reflects an increased use of debt financing relative to equity.

Interest Coverage Ratio

This ratio experiences a significant downward trend across the timeline. Starting at a very high level of 36.25 in March 2021, it peaks slightly around late 2021 and early 2022 at approximately 52.00, then gradually declines quarter by quarter to around 11.71 by September 2025. Despite remaining above critical levels, this trend indicates a diminishing buffer in earnings available to cover interest expenses, which could imply escalating interest obligations or reduced earnings.

Overall, the data suggests increasing leverage within the company's capital structure, as seen from rising debt ratios and financial leverage. Concurrently, the declining interest coverage ratio highlights a decreasing margin of safety in servicing debt costs, potentially implicating higher financial risk if the trend continues. The company appears to be shifting towards more debt financing, which may impact its future financial flexibility and risk profile.

The company's total debt and stockholders' equity figures exhibit specific trends over the analyzed periods, impacting the debt to equity ratio accordingly.

Total Debt

Total debt generally increased over the timeframe, starting at $6,250 million and rising to a peak of $14,189 million in the first quarter of 2024. Following that peak, the debt level slightly fluctuated around the $13,500 to $14,000 million range, ending at $14,046 million by the third quarter of 2025. This upward trend indicates that the company took on more debt over the period analyzed, with occasional periods of stabilization.

Stockholders' Equity

Stockholders' equity steadily increased from $10,166 million at the beginning of the period to $17,268 million in the third quarter of 2024, showing growth in the company's net assets. However, after this peak, equity slightly declined to approximately $16,400 million by mid-2025 before a minor increase towards the end of the period monitored. Overall, equity growth was robust but showed some variability in the later periods.

Debt to Equity Ratio

The debt to equity ratio started at 0.61 and showed minor fluctuations in the early periods, largely ranging between 0.5 and 0.7, reflecting a moderate leverage level. After the first quarter of 2023, the ratio increased significantly, reaching a high of 0.84 in March 2024, indicating that debt rose faster than equity. Following this peak, the ratio stabilized slightly between 0.78 and 0.86 through mid-2025, suggesting a steady but higher leverage compared to earlier periods.

In summary, the company demonstrated an overall increase in leverage, with total debt outpacing equity growth particularly from early 2023 onward. The rise in the debt to equity ratio to levels above 0.8 after this period indicates a strategic shift to more debt financing or increased borrowing relative to equity. Despite this increased leverage, equity growth remained positive, supporting the company's financial base. This pattern suggests a greater reliance on debt funding while maintaining a solid equity position, which may impact the company's risk profile and cost of capital moving forward.

The financial data reveals several notable trends in the company's capital structure over the observed periods. Total debt shows an overall upward trajectory, rising from $6,250 million in March 2021 to a peak of approximately $14,189 million by March 2024. Despite some fluctuations, the general pattern indicates increasing leverage, with total debt reaching around $14,046 million by September 2025.

Total capital also exhibits consistent growth, starting at $16,416 million in March 2021 and increasing steadily to reach a high of $31,172 million by March 2024. Following this peak, total capital experiences slight variability but maintains a high level, concluding near $30,673 million by September 2025.

Debt to Capital Ratio

The ratio fluctuates within a defined range, beginning at approximately 0.38 in March 2021, showing minor decreases and increases throughout the periods. It decreases to a low of 0.34 in June 2022, then gradually rises to 0.46 by March 2024. This elevated ratio remains relatively stable through to September 2025, indicating a higher proportion of debt within the company's capital structure compared to earlier periods.

Overall, the company has increased both its total capital and debt levels significantly over the timeframe, with a growing emphasis on debt financing as reflected by the rising debt to capital ratio. This implies a strategic inclination towards leveraging, potentially to fund growth or investment initiatives. However, the maintenance of the debt to capital ratio around mid-40s suggests a conscious balance between debt and equity financing to manage financial risk.

Total Debt

The total debt exhibits an overall increasing trend over the reported periods. Starting from approximately 6.25 billion US dollars, it rose gradually with some fluctuations, reaching around 14 billion US dollars by the end of the latest period. Notably, there were moderate increases during certain intervals, such as between early 2023 and early 2024, reflecting a significant rise in debt levels.

Total Assets

Total assets also show a consistent upward trajectory throughout the periods. Beginning at roughly 19.6 billion US dollars, assets increased steadily, surpassing 35 billion US dollars towards the most recent quarters, although a slight decline is observed in the period immediately preceding the last quarter. This growth in assets indicates ongoing expansion or accumulation of resources.

Debt to Assets Ratio

The debt to assets ratio fluctuates within a range of about 0.29 to 0.41 over time. Initially, it remained around 0.3, indicating moderate leverage. However, starting from early 2023, this ratio trends upward, reaching levels near 0.4 in the most recent periods. This increase suggests a growing reliance on debt financing relative to the asset base, reflecting potentially higher financial leverage.

Summary of Financial Position

Overall, the data reveal a pattern of growing total assets accompanied by a rising total debt, with the debt to assets ratio increasing in latter periods. This pattern may imply strategic leveraging, possibly to support expansion or capital investments. The elevated leverage ratio in the most recent periods signals increased financial risk, which should be monitored in future assessments.

The analysis of the quarterly financial data reveals distinct trends in total assets, stockholders' equity, and financial leverage over the examined periods.

Total Assets

Total assets demonstrate a consistent upward trajectory from March 31, 2021, to December 31, 2024, increasing from approximately $19.6 billion to nearly $35.5 billion. This steady growth indicates ongoing asset accumulation or appreciation over the observed timeframe. However, there is a slight contraction noted around March 31, 2025, where total assets decline to approximately $33.8 billion before rebounding marginally in subsequent quarters to about $35.0 billion. This minor fluctuation suggests potential short-term asset divestitures or revaluations but does not significantly alter the overall growth trend.

Stockholders’ Equity

Stockholders’ equity has also exhibited a general upward movement, rising from roughly $10.2 billion at the start of the period to a peak near $17.3 billion by December 31, 2024. This positive trend reflects accumulation of retained earnings, capital contributions, or other equity enhancements. Nonetheless, there is noticeable stagnation and minor declines following the peak, with equity decreasing to about $16.4 billion by mid-2025, indicating possible share buybacks, dividend payments, or losses that tempered equity growth in the most recent quarters.

Financial Leverage

The financial leverage ratio, calculated as total assets divided by stockholders' equity, reveals a fluctuating yet gradual increase over the period. Beginning at 1.93 in early 2021, the leverage ratio dips slightly in mid-2021 and 2022, reaching a low of 1.75, indicating a period of relatively lower borrowing or higher equity buffering. From late 2022 onwards, financial leverage rises steadily, surpassing 2.00 around early 2024 and peaking at approximately 2.13 in mid-2025. This trend suggests that the company has been increasingly using debt or other liabilities to finance asset growth relative to equity, pointing to a more leveraged capital structure in recent periods.

In summary, the data showcase consistent growth in total assets and stockholders’ equity with a moderate contraction near early 2025, accompanied by an increasing financial leverage ratio in the latter periods. This pattern indicates expansion supported by progressively higher leverage, balanced with maintained equity levels, though recent equity declines warrant monitoring for potential impacts on financial stability.

The analysis of the quarterly financial data reveals several notable trends regarding the company's earnings before interest and tax (EBIT), interest and debt expense, and interest coverage ratio over the observed period.

Earnings Before Interest and Tax (EBIT)

The EBIT exhibited an overall upward trend from early 2021 through mid-2022, peaking at 2,730 million US dollars in June 2022. Subsequently, it demonstrated a downward trajectory, particularly marked in the last quarters of 2022 and the first half of 2023, reaching a low of 1,409 million US dollars in March 2024. Following this decline, EBIT showed some recovery toward the end of the period analyzed, with figures fluctuating but trending upward to reach 1,725 million US dollars by September 2025. This pattern suggests volatility in operational profitability, with a significant peak followed by contraction and gradual improvement.

Interest and Debt Expense

The interest and debt expenses gradually increased throughout the entire period. Starting at 46 million US dollars in March 2021, this expense steadily climbed to reach 141 million US dollars by September 2025. The increase was relatively continuous, indicating a rise in the cost of debt or higher debt levels over time, which may have exerted pressure on profitability.

Interest Coverage Ratio

The interest coverage ratio started at a very strong level of 36.25 in March 2021, improving to a peak of approximately 52 during mid-2022. This indicates a strong ability to cover interest expenses with operating earnings at that time. However, following the peak, the ratio declined steadily, reflecting the combined effect of decreasing EBIT and increasing interest expenses. By September 2025, the ratio had decreased to approximately 11.71, still indicating coverage above the minimum thresholds for financial health but showing a notable weakening in the company's ability to service interest obligations relative to earnings.

In summary, the data indicates that the company experienced strong operational profitability and excellent interest coverage ratio in the earlier periods, followed by a period of reduced earnings and a gradual increase in debt-related expenses. While the interest coverage ratio remains adequate, the declining trend suggests increasing financial risk. Careful monitoring of debt levels and efforts to stabilize or improve EBIT would be prudent to maintain financial stability going forward.