Workday Inc. (NASDAQ:WDAY)

Return on Assets (ROA)

The ROA exhibited a negative trend from early 2020 through mid-2022, beginning at -7.05% in January 2020 and gradually improving to near zero by October 2021, peaking slightly positive at 0.33% before declining again into negative territory by mid-2022. From then, the ROA deteriorated again until early 2023 before beginning a steady and marked recovery from mid-2023 onward, reaching a peak above 9% in late 2024. The most recent data points in early 2025 show a slight decrease but still maintain positive levels.

Financial Leverage

Financial leverage demonstrated a gradual decline from 2.85 in April 2019 to below 2.0 by mid-2024. This indicates a consistent reduction in the use of debt relative to equity over the observed period. The decline was relatively steady with minor fluctuations, and the leverage ratio remained stable around 1.9 to 2.0 in the latter quarters. This trend suggests a strategic deleveraging process or possibly improving equity base over time.

Return on Equity (ROE)

The ROE followed a pattern similar to that of ROA, starting from deeply negative levels in early 2020, with a nadir of approximately -20.09% in mid-2020. It then showed gradual improvement, crossing into positive territory in late 2021, followed by fluctuations with a downward trend during 2022 and early 2023. From mid-2023, there was a pronounced upward trajectory, with ROE reaching levels above 18% by the end of 2024. The data for early 2025 indicate a slight reduction but still reflect robust positive returns.

Net Profit Margin

The net profit margin demonstrates a clear trend of improvement over the analyzed periods. Initially, the margin was negative, with values such as -13.25% in January 2020, gradually improving to a positive range around mid-2021. Following this, there was a slight decline again into negative territory through early 2023. Subsequently, a significant increase is observed starting from April 2023, reaching peaks above 19%, before showing a modest decrease toward mid-2025. The fluctuations indicate periods of financial difficulty followed by strong recovery and profitability.

Asset Turnover

The asset turnover ratio remains relatively stable over the periods, mostly fluctuating within the range of 0.42 to 0.53. A slight decrease is visible during mid-2022 but rebounded in later periods. The consistency in asset efficiency suggests that the company’s ability to generate sales from its assets has been steady, with minor variations rather than significant shifts.

Financial Leverage

The financial leverage ratio shows a gradual declining trend from 2.85 in early 2019 to around 1.9 in late 2024 and early 2025. This steady reduction suggests a decrease in the use of debt relative to equity over time, indicating potentially lower financial risk or conscious deleveraging efforts. The trend is consistent with efforts to strengthen the company’s capital structure.

Return on Equity (ROE)

ROE exhibits a trajectory similar to that of net profit margin, starting substantially negative in early 2020, reflecting losses impacting shareholders’ returns. The ratio improves steadily, crossing into positive territory around mid-2021, followed by minor declines and recovery phases. Starting from 2023, ROE rises markedly, achieving significant positive returns exceeding 18% in mid-2024. This pattern aligns with profitability improvements and suggests enhanced value creation for equity holders during the latter part of the timeline.

The financial data reveals several important trends in profitability and efficiency metrics over the observed periods.

Net Profit Margin

The net profit margin started with negative values, reflecting initial losses, which gradually decreased in absolute terms from -13.25% to close to zero by early 2021. This indicates an improvement in profitability over time. However, there was a subsequent decline starting mid-2021 through early 2023, with margins falling again into negative territory, reaching around -5.9% at its lowest point. From early 2023 onwards, a notable recovery is observed, with net profit margins turning positive and significantly increasing to approximately 19% by early 2024. This sharp improvement suggests a strong turnaround in operational profitability, although the margin slightly declined towards mid-2025, settling around 5-6%.

Asset Turnover

The asset turnover ratio demonstrated relative stability throughout the periods, fluctuating modestly between 0.42 and 0.53. Initially, the ratio held steady at 0.53 before a gradual decline to a low of 0.42 by mid-2022. Following this low, there is a recovery trend with the ratio moving back upwards, reaching approximately 0.5 by early 2025. This pattern implies consistent asset utilization efficiency with some temporary declines, followed by stabilization.

Return on Assets (ROA)

The return on assets followed a trajectory similar to the net profit margin. Beginning the period with negative returns, ROA improved from -7.05% to near break-even around early 2021. Subsequent periods saw a decline back into negative territory, dipping as low as -2.72% in late 2022. From early 2023, ROA showed considerable improvement, turning positive and increasing sharply to nearly 9.9% by early 2024, before retracting slightly to around 2.8% mid-2025. These fluctuations correspond with changes in net profitability and suggest improved efficiency in asset usage during the latter periods.

Overall, the data reflects a phase of losses transitioning to profitability accompanied by stable asset use. The notable turnaround in profitability metrics from 2023 onwards points to successful strategic or operational adjustments leading to enhanced financial performance. However, some caution is advised given the recent slight declines after peak values.