Medtronic PLC (NYSE:MDT)

Return on Assets (ROA)

The ROA exhibits variability over the observed periods, beginning with several missing values. Starting from the fourth quarter of 2019, the ROA shows a declining trend from 5.28% to a low of 2.97% in the second quarter of 2020. Following this dip, there is a gradual recovery with the ratio increasing to about 5.79% by the fourth quarter of 2022. Subsequently, the ROA decreases again, falling to approximately 3.99% in the second quarter of 2023. From mid-2023 onward, the trend turns upward, with ROA reaching levels slightly above 5% by the second quarter of 2025. Overall, the ROA reflects fluctuations with periods of both decline and recovery, but it trends slightly upward toward the end of the dataset.

Financial Leverage

Financial leverage starts at 1.81 and remains relatively stable, fluctuating within a narrow range between 1.71 and 1.92 over the entire period. The ratio peaks around early 2021 and early 2025 at about 1.91-1.92 and reaches its lowest point at approximately 1.71 in the first quarter of 2022. Notably, the financial leverage shows minor cyclical movements but no substantial upward or downward trend, suggesting a consistent approach to the use of debt relative to equity.

Return on Equity (ROE)

The ROE begins from missing values in the initial quarters and then shows a declining trend from 9.44% in the third quarter of 2019 to a low of 5.7% in the second quarter of 2020. From this point, ROE gradually recovers, peaking near 9.88% in the fourth quarter of 2022. Following this peak, ROE decreases again to around 7.07% in the second quarter of 2023. Thereafter, an upward trajectory emerges, with ROE increasing to 9.73% by the second quarter of 2025. The pattern of ROE largely mirrors that of ROA, indicating correlated performance between asset profitability and shareholder equity returns.

The financial data indicates several key trends across the measured quarters in terms of profitability, efficiency, leverage, and returns.

Net Profit Margin

The net profit margin shows a fluctuating pattern. Initially, the margin is moderately high, reaching around 16.56% in mid-2020. Afterward, there is a decline through early 2021, bottoming near 10.36%, followed by a recovery phase peaking again close to 16.75% by mid-2022. Subsequently, the margin undergoes a gradual decrease, reaching a low of approximately 11.36% in early 2024, then recovering slightly toward 13.63% by mid-2025. Overall, the margin demonstrates some volatility with periods of both contraction and expansion.

Asset Turnover Ratio

The asset turnover ratio remains relatively stable with a mild upward trend. Starting around 0.32 in mid-2020, it dips slightly in late 2020 and early 2021 but recovers and increases steadily to approximately 0.38 by mid-2025. This upward movement suggests improving efficiency in using assets to generate revenue over time.

Financial Leverage Ratio

Financial leverage exhibits minor fluctuations but generally remains in a narrow band between 1.7 and 1.9. Initially, the ratio is close to 1.8, rising to about 1.92 in early 2021. Following this peak, there is a gradual decline back toward 1.71 by mid-2022, before gradually increasing again close to 1.9 by mid-2025. The relatively stable leverage level indicates consistent use of debt relative to equity.

Return on Equity (ROE)

The return on equity follows a pattern broadly similar to net profit margin, with some lag. Starting at 9.44% in mid-2020, ROE declines to a low of approximately 5.7% in early 2021, indicating reduced profitability on shareholders' equity during that period. Subsequently, ROE rises steadily, crossing 9.7% by mid-2022, before declining again to roughly 7.07% in early 2023. In the following quarters, it climbs gradually, reaching near 9.73% by mid-2025. Overall, ROE demonstrates cyclicality with periods of recovery and softness that mirror trends in profit margins and efficiency.

The analyzed financial data reveals distinct trends and patterns across various performance and leverage metrics over the observed periods.

Tax Burden Ratio

The tax burden ratio initially shows relatively high values above one in mid-2020, indicating potential accounting or timing effects. Subsequently, it decreases steadily from around 0.93 in the third quarter of 2020 to a low near 0.66 by early 2023, followed by a gradual increase stabilizing around 0.83 in the most recent quarters. This pattern suggests a reduction in tax expense relative to pre-tax income during the earlier periods and a normalization or increasing tax burden in later periods.

Interest Burden Ratio

The interest burden ratio started below 0.80 in early periods, reached a low of 0.73 in the second quarter of 2020, but then increased significantly and stabilized near 0.90 from 2021 onward. The ratio remains close to 0.87–0.89 in more recent quarters, suggesting relatively lower interest expense impact on operating income in these periods compared to earlier ones.

EBIT Margin (%)

The EBIT margin declined from about 17.7% in the third quarter of 2019 to a low near 12.4% in the second quarter of 2020, indicating squeezed operating profitability during that time, possibly due to external economic or operational challenges. Over subsequent quarters, it gradually improved, peaking above 20% in mid to late 2022, before slightly decreasing but remaining robust around 18.6% in the latest period. This indicates a strong recovery and stable operating profit margins.

Asset Turnover Ratio

The asset turnover ratio remained relatively stable across the periods, fluctuating modestly between 0.29 and 0.38. Notably, there is a slight upward trend from 0.32 in mid-2019 to around 0.37–0.38 in the most recent quarters, reflecting improved efficiency in generating revenue from assets.

Financial Leverage Ratio

Financial leverage showed moderate variation, starting near 1.81 and peaking around 1.92 in early 2021, then declining gradually to about 1.71 during mid-2022, before rising again to approximately 1.90 by the latest observed quarter. This suggests fluctuations in the use of debt relative to equity, with periods of both deleveraging and increased leverage.

Return on Equity (ROE) (%)

The ROE displays a declining trend from 9.44% in mid-2020 down to a trough of about 5.7% in the second quarter of 2020, likely impacted by reduced earnings and operational challenges in that timeframe. It then shows gradual recovery with oscillations, reaching around 9.7% by early 2025. The improvement in ROE corresponds with enhancements in operating margins and asset efficiency, partly offset by changes in leverage and tax burden.

In summary, the company experienced a period of contraction in profitability and efficiency around early 2020, with gradual recovery and strengthening in subsequent years. Operating margins improved significantly post-2020, supported by steady asset turnover and manageable interest costs. Leverage remained moderate with some fluctuations, and tax burden ratios normalized after an initial reduction. Overall, return on equity trends reflect these underlying operational and financial shifts, culminating in improved shareholder returns towards the latest periods.

Net Profit Margin

The net profit margin data commences from the quarter ending in April 2020, starting at 16.56%. It then experiences a general decline through early 2021, reaching a low of 10.36% in April 2021. From mid-2021 onwards, the net profit margin shows a recovery trend, rising to peaks around 16.75% in July 2022. However, following this peak, it again declines steadily to 11.47% by April 2023. A moderate increase is observed towards the end of the series, with margins around 13.9% in July 2024 and maintaining above 13% through early 2025. Overall, the margin demonstrates fluctuations with periods of decline and recovery but does not return to its initial peak levels.

Asset Turnover

Asset turnover ratios begin from April 2020 at 0.32 and initially decline slightly to 0.29 in early 2021. From mid-2021 onwards, the ratio exhibits a generally upward trend, increasing from 0.32 to 0.38 by the later quarters in 2025. This gradual improvement suggests better efficiency in using assets to generate sales over the observed period.

Return on Assets (ROA)

Return on assets starts at 5.28% in April 2020 and declines sharply to 2.97% by April 2021, mirroring the trend seen in net profit margin. Subsequently, the ROA recovers steadily, reaching a peak of 5.79% in July 2022. This peak is followed by a modest decline and a stabilization phase around 4.0%-5.0% from 2023 to 2025. The overall pattern indicates an initial weakening in asset profitability, followed by gradual improvement and relative stabilization.

Summary

The financial ratios exhibit cyclical behavior with an initial period of decline around 2020-2021, likely reflecting external challenges or operational inefficiencies. Net profit margin and ROA both show signs of recovery starting in mid-2021, peaking around mid-2022, and then settling into a moderate level by 2025. Asset turnover steadily improves from 2021 through 2025, suggesting enhanced operational efficiency. Collectively, these trends indicate that after facing some financial pressures, performance metrics improved and then stabilized in recent quarters.

The financial data reveals several notable trends in the company's performance metrics from July 2020 through July 2025. The analysis focuses on ratios including Tax Burden, Interest Burden, EBIT Margin, Asset Turnover, and Return on Assets (ROA).

Tax Burden

The Tax Burden ratio exhibits a general declining trend over the observed periods. Beginning at approximately 1.19 in July 2020, the ratio decreases steadily to a low near 0.66 in April 2023. Following this trough, the ratio stabilizes around the 0.75 to 0.84 range through to July 2025. This downward trend suggests a reduction in the effective tax rate or improved tax efficiency, followed by a period of stabilization.

Interest Burden

The Interest Burden ratio shows some variability initially, moving from 0.79 in July 2020 to around 0.75 by January 2021. From then onwards, the ratio exhibits a general improvement, increasing to approximately 0.9 in early 2021 and maintaining a high level close to 0.87 to 0.89 through to 2025. The stable and relatively high Interest Burden ratio in recent periods indicates consistent earnings retention before interest expenses, reflecting effective management of financial costs.

EBIT Margin

The EBIT Margin percentage fluctuates within the range of roughly 12.4% to 20.2% during the period observed. It dips to a low near 12.4% in April 2020 but recovers steadily thereafter, reaching a peak around 20.2% by July 2022. Subsequently, the margin remains relatively stable around 18% to 19% through July 2025, with minor fluctuations. This suggests the company experienced an initial contraction in operating profitability but successfully improved and maintained robust EBIT margins over time.

Asset Turnover

Asset Turnover demonstrates a gradual but consistent upward trend from 0.32 in July 2020 to 0.38 by July 2025. This indicates a slow but steady improvement in how effectively the company uses its assets to generate revenue, reflecting enhanced operational efficiency.

Return on Assets (ROA)

ROA percentages vary over the period, starting at 5.28% in July 2020 and declining to a low of approximately 2.97% in April 2020. This is followed by a recovery phase, with ROA increasing back above 5% by July 2025. The trend suggests initial operational challenges or asset inefficiencies which were later addressed, leading to improved profitability relative to total assets.

Overall, the data indicates an initial period of pressure on profitability and tax metrics around early 2020, likely due to external or operational challenges. Following this, the company demonstrates recovery and improvement across key financial ratios. Margins and asset efficiency improve steadily, interest costs are well managed, and tax burden reduction contributes to enhancing net returns. By mid-2025, the company appears to maintain solid operational and financial health as reflected by stabilized EBIT margins, consistent interest and tax burdens, increasing asset turnover, and improved return on assets.

The analysis of the quarterly financial ratios reveals several noteworthy trends in profitability and burden metrics over the periods presented.

Tax Burden Ratio

The tax burden ratio started at a relatively high level above 1.15 in mid-2020 but showed a significant decline thereafter, decreasing gradually to a low of approximately 0.66 in early 2023. Since then, it demonstrated a recovery trend, rising to stabilize around 0.83 towards mid-2025. This pattern indicates fluctuations in the effective tax rate impacting net earnings.

Interest Burden Ratio

The interest burden ratio remained fairly stable, generally ranging from around 0.75 to 0.91 between mid-2020 and mid-2025. There was an initial rise from approximately 0.79 to a peak of 0.91 in mid-2021, followed by minor fluctuations but overall stability near the higher bound around 0.87 to 0.88 towards the latest periods. This suggests consistent management of interest expenses relative to earnings before interest and taxes.

EBIT Margin

The EBIT margin experienced some volatility initially, declining from 17.74% in mid-2020 to a low near 12.42% in early 2021. Subsequently, it showed a marked improvement and upward trend, reaching a peak around 20.24% in mid-2022. After this peak, the margin slightly moderated but was maintained within a relatively high range between 17% and 19% up to mid-2025. This indicates effective control over operating profitability with a recovery and stabilization at healthy levels following an earlier dip.

Net Profit Margin

The net profit margin mirrored some of the EBIT margin's trends but with generally lower values, starting at about 16.56% in mid-2020 and declining sharply to near 10.36% by early 2021. Thereafter, it improved steadily, achieving a peak of 16.75% in mid-2022. The margin then declined again toward early 2023 before showing a modest recovery and stabilizing in a range from about 12% to 14% through mid-2025. This fluctuation reflects the combined influence of operating performance, interest burden, and tax impacts on bottom-line profitability.

Overall, the data illustrate initial stresses in profitability and tax efficiency during 2020 and early 2021, followed by a recovery phase with enhanced margins and more favorable tax conditions. Interest expenses appear managed consistently throughout the timeline. The periods after mid-2022 show a phase of stabilization, with margins sustaining at moderate to strong levels, suggesting resilience and improved operational control.