Workday Inc. (NASDAQ:WDAY)

Return on Assets (ROA)

The return on assets exhibited a notable fluctuation over the observed periods. Initially, ROA was significantly negative at -7.05% in 2020 but improved steadily to a positive 0.28% by 2022. Subsequently, it declined again to -2.72% in 2023 before sharply rising to 8.39% in 2024. The most recent data point in 2025 shows a decrease to 2.93%, indicating some volatility but an overall improvement compared to the start of the period.

Financial Leverage

Financial leverage saw a gradual decline throughout the analyzed years, decreasing from 2.74 in 2020 to 1.99 in 2025. This downward trend suggests a steady reduction in the company's reliance on debt financing relative to equity, reflecting a move towards a potentially more conservative capital structure.

Return on Equity (ROE)

Return on equity mirrored the trend observed in ROA but with amplified variability. It started at a deeply negative -19.33% in 2020, improved towards positive territory by 2022 at 0.65%, then fell back to -6.57% in 2023. A substantial positive spike occurred in 2024, with ROE reaching 17.09%, followed by a decrease to 5.82% in 2025. This pattern indicates fluctuations in profitability from shareholders' perspectives, with a recent trend towards improved returns despite some instability.

Net Profit Margin

The net profit margin showed a fluctuating trend over the years. Initially, it was negative at -13.25% in 2020, indicating losses. It improved gradually to a positive margin of 0.57% by 2022. However, the margin declined again to -5.9% in 2023 before significantly increasing to 19.02% in 2024, followed by a decrease to 6.23% in 2025. This pattern suggests periods of both profitability and losses with notable volatility.

Asset Turnover

The asset turnover ratio demonstrated a gradual decline from 0.53 in 2020 to a low of 0.44 in 2024, followed by a slight recovery to 0.47 in 2025. This decreasing trend indicates a diminishing efficiency in generating revenue from assets over most of the period, with a minor improvement in the final year.

Financial Leverage

Financial leverage decreased steadily from 2.74 in 2020 to 1.99 in 2025. This decline reflects a reduction in the use of debt relative to equity, suggesting an overall conservative approach to financing and potentially lower financial risk by the end of the period.

Return on Equity (ROE)

The return on equity mirrored the net profit margin's volatility. It started at a negative -19.33% in 2020, improved to a small positive 0.65% in 2022, then fell back to -6.57% in 2023. There was a significant increase to 17.09% in 2024 before declining again to 5.82% in 2025. These fluctuations indicate inconsistent profitability and varying returns to shareholders during the period.

Tax Burden

The tax burden ratio exhibits notable fluctuations over the periods presented. Data is absent for the initial years, but available points indicate significant volatility, with a peak at 3.88 followed by a sharp decline to 0.82. This suggests inconsistent tax effects on net income, potentially influenced by changes in tax policies or one-time tax events.

Interest Burden

Interest burden shows a generally increasing trend, beginning at 0.49 and rising to 0.85 by the last period. This increase may reflect rising interest expenses relative to earnings before interest and taxes, which could indicate higher leverage costs or increased debt levels impacting profitability.

EBIT Margin

The EBIT margin reveals a progressive improvement over the timeframe. Starting from a negative margin of -11.68% in the earliest available period, there is a consistent recovery, culminating in a positive margin of 8.9% by the last period. This trend suggests improved operational efficiency and profitability at the earnings before interest and tax level.

Asset Turnover

Asset turnover demonstrates a gradual decline from 0.53 down to 0.44, with a slight recovery to 0.47 in the final period. This slight downward trend may indicate a decrease in the efficiency with which the company is generating revenue from its assets, although the recent uptick might suggest the early stages of operational improvement.

Financial Leverage

Financial leverage steadily decreases from 2.74 to 1.99 across the periods. This declining leverage ratio indicates a reduction in the use of debt financing relative to equity, suggesting a more conservative capital structure or an increased equity base over time.

Return on Equity (ROE)

ROE reflects significant volatility throughout the years. Initially, it is deeply negative at -19.33%, improving to positive territory at 0.65%, followed by another dip to -6.57%. Subsequently, a marked increase to 17.09% occurs before settling at 5.82% in the last period. This pattern demonstrates fluctuating profitability and shareholder returns, impacted by variations in operational performance, leverage, and tax influences.

The analysis of the financial ratios over the six-year period reveals notable fluctuations and trends across profitability and efficiency metrics.

Net Profit Margin

The net profit margin shows significant volatility during the period. It started with a negative margin of -13.25% in 2020, indicating net losses. There was a gradual improvement reaching a slight positive margin of 0.57% in 2022. However, in 2023, the margin declined again to -5.9%. Subsequently, a marked recovery occurred with a substantial positive margin of 19.02% in 2024, followed by a decrease to 6.23% in 2025. Overall, the margin demonstrates a transition from losses to profitability, with a peak in 2024, but a decline afterward.

Asset Turnover

Asset turnover experienced a consistent downward trend from 0.53 in 2020 to 0.44 in 2024, indicating a gradual reduction in the efficiency with which assets were used to generate revenue. In 2025, there was a mild rebound to 0.47, suggesting some recovery in asset utilization efficiency. The overall pattern points to challenges in maintaining asset productivity over the years with a slight improvement at the end of the period.

Return on Assets (ROA)

The return on assets mirrored the net profit margin’s pattern, being negative at the start (-7.05% in 2020) and improving to a near neutral 0.28% by 2022. It then declined again in 2023 to -2.72% before sharply rising to 8.39% in 2024. In 2025, the ROA dropped to 2.93%, still positive but significantly below the previous year’s peak. This indicates variability in the company’s ability to generate profits from its assets, with a notable improvement in 2024 followed by a decrease, although remaining positive.

In summary, the financial data indicate a company experiencing fluctuating profitability and efficiency levels. While profitability improved markedly in 2024, both net profit margin and ROA exhibited volatility, and asset turnover generally declined with a mild recovery in the final year. These patterns suggest operational or market challenges affecting consistent performance, with potential areas to focus on improving asset utilization and sustaining profitability gains.

Tax Burden

The tax burden ratio displays notable volatility across the periods. It was not reported in the early years but shows a significant increase to 1.82 in 2022, peaks sharply at 3.88 in 2024, then declines substantially to 0.82 by 2025. This pattern suggests considerable fluctuations in the company's effective tax rate or tax-related expenses over the recent years.

Interest Burden

Interest burden demonstrates a rising trend from 0.49 in 2022 to 0.76 in 2024, reaching 0.85 in 2025. This indicates a gradual increase in interest expenses relative to earnings before interest and taxes, potentially reflecting higher debt levels or increased borrowing costs over the recent periods.

EBIT Margin

The EBIT margin shows improvement over time despite some fluctuations. It started with negative margins of -11.68% in 2020 and -4.78% in 2021, shifted to a small positive margin of 0.64% in 2022, declined again to -2.54% in 2023, then recovered to a healthy positive margin of 6.47% in 2024 and further to 8.9% in 2025. This overall trend suggests enhanced operational efficiency and profitability in recent years after a period of losses.

Asset Turnover

Asset turnover shows a gradual downward trend from 0.53 in 2020 to a low of 0.44 in 2024, followed by a slight recovery to 0.47 in 2025. This indicates a mild decrease in the efficiency by which the company utilizes its assets to generate revenue, though the marginal rebound in the last period may signal stabilization or slight improvement in asset utilization.

Return on Assets (ROA)

ROA mirrors the fluctuations seen in profitability metrics. It began negative at -7.05% in 2020, improved steadily to -3.24% in 2021 and reached a marginal positive 0.28% in 2022. A setback occurred in 2023 with a decline back to -2.72%, followed by a sharp recovery to 8.39% in 2024. However, it pulled back to 2.93% in 2025. These variations point to a volatile profitability profile with significant improvements in profitability accompanied by some inconsistencies across recent years.

Tax Burden Ratio

The tax burden ratio shows irregular fluctuations over the reported periods, with available data points indicating a rise from 1.82 in 2022 to a peak of 3.88 in 2024, followed by a sharp decline to 0.82 in 2025. This pattern suggests variability in tax-related liabilities or credits impacting net income differently across the years.

Interest Burden Ratio

Interest burden exhibits an upward trend from 0.49 in 2022 to 0.85 in 2025, indicating an increasing proportion of earnings before interest and taxes being absorbed by interest expenses. This trend may reflect changes in debt levels or borrowing costs over the recent years.

EBIT Margin

The EBIT margin has improved significantly over the time period analyzed. Starting from a negative margin of -11.68% in 2020, it improved to a positive margin of 0.64% in 2022 despite a dip in 2023. The margin further increased to 6.47% in 2024 and reached 8.9% in 2025, demonstrating enhanced operational profitability and efficiency in managing operating expenses.

Net Profit Margin

The net profit margin trajectory shows a recovery from negative values in 2020 and 2021 (-13.25% and -6.54%, respectively) to marginal profitability in 2022 at 0.57%. However, it decreased again in 2023 to -5.9% before a substantial increase to 19.02% in 2024, followed by a moderate reduction to 6.23% in 2025. This volatility suggests variable impacts from non-operating items, taxation, or extraordinary events influencing net profitability.