Medtronic PLC (NYSE:MDT)

Return on Assets (ROA)

The Return on Assets exhibits some fluctuations over the observed periods. Starting at 5.28% in April 2020, it decreased to 3.87% in April 2021, then climbed to a peak of 5.54% in April 2022. Subsequently, ROA declined again to around 4.1% in the next two years, before rising to 5.09% in April 2025. This pattern indicates variability in the company’s efficiency in using its assets to generate profits, with the highest efficiency recorded in 2022 and a recovery trend observed in the last reported year.

Financial Leverage

Financial Leverage remained relatively stable throughout the years, fluctuating within a narrow range around 1.7 to 1.9. The ratio started at 1.79 in April 2020, reached a low of 1.73 in April 2022, and gradually increased, ending at 1.91 in April 2025. This steady leverage suggests a consistent approach to the use of debt in the capital structure, with a slight increase in reliance on debt financing in the most recent period.

Return on Equity (ROE)

The Return on Equity follows a trend similar to ROA but with a wider range. Beginning at 9.44% in 2020, it fell to 7.01% in 2021, experienced a rise to 9.59% in 2022, and then dropped again to approximately 7.3% for the subsequent two years. Finally, ROE increased significantly to 9.71% in 2025. These variations mirror changes in profitability relative to equity and suggest fluctuations in overall financial performance, possibly influenced by both asset utilization and leverage.

The financial data reveals several notable trends in profitability, efficiency, leverage, and overall return over the six fiscal years observed.

Net Profit Margin (%)

The net profit margin exhibits moderate fluctuations throughout the periods. Starting at 16.56% in April 2020, there is a noticeable decline to 11.97% by April 2021. It recovers to 15.9% in April 2022 but again decreases to 12.03% in April 2023 and slightly further to 11.36% in April 2024. The margin then experiences an improvement to 13.9% in April 2025. Overall, the margin indicates some volatility, with peaks and troughs but a tendency to remain within the 11% to 16% range.

Asset Turnover (ratio)

The asset turnover ratio demonstrates a gradual upward trend over the period. It remains steady at 0.32 in the first two years (2020 and 2021) before increasing to 0.35 in 2022. There is a minor dip to 0.34 in 2023, followed by consistent growth to 0.36 in 2024 and 0.37 in 2025. This pattern suggests incremental improvements in asset utilization and efficiency in generating revenue from the asset base.

Financial Leverage (ratio)

Financial leverage remains relatively stable with slight fluctuations. It begins at 1.79 in 2020 and increases slightly to 1.81 in 2021, then decreases to 1.73 in 2022. The ratio climbs back to 1.77 in 2023 and 1.79 in 2024, finally rising to 1.91 in 2025. This indicates a modest increase in leveraging of assets through debt or other liabilities over time, with a more pronounced increase in the final year.

Return on Equity (ROE) (%)

ROE follows a pattern somewhat similar to net profit margin, with fluctuations across the years. Initially recorded at 9.44% in 2020, it declines sharply to 7.01% in 2021. The figure increases to 9.59% in 2022, then drops to 7.3% and remains nearly flat at 7.32% in 2023 and 2024 respectively, before rising again to 9.71% in 2025. This movement reflects variability in the company's ability to generate returns for shareholders, with intermittent recoveries after periods of decline.

In summary, the data indicates that while profitability and return metrics experience some erosion and recovery over the years, operational efficiency as measured by asset turnover shows steady improvement. The company’s financial leverage remains moderately stable but trends slightly upwards, which may impact risk and return dynamics going forward.

Tax Burden

The tax burden ratio demonstrates a general decreasing trend from 1.19 in 2020 to a low of 0.7 in 2023, followed by a moderate increase to 0.83 in 2025. This suggests that the company experienced a reduction in the proportion of earnings paid as taxes up to 2023, with a slight relative increase thereafter.

Interest Burden

The interest burden ratio has shown a gradual improvement, rising from 0.79 in 2020 to around 0.88 in 2025. This indicates a steady reduction in the impact of interest expenses on earnings over the period.

EBIT Margin

The EBIT margin experienced some fluctuations. It declined from 17.74% in 2020 to 15.92% in 2021, then increased significantly to peak at about 19.13% in 2023. A slight dip occurred in 2024 to 17.08%, with recovery to 18.87% in 2025. Overall, profitability at the EBIT level shows resilience with some variability.

Asset Turnover

Asset turnover ratios indicate a slow but steady increase, moving from 0.32 in 2020 to 0.37 in 2025. This reflects gradual improvement in the efficiency of asset utilization to generate sales over the years.

Financial Leverage

Financial leverage remains relatively stable, fluctuating slightly around the range of 1.73 to 1.91, with a modest upward trend in the final year to 1.91 in 2025. This suggests consistent use of debt or other liabilities in the capital structure without significant changes in leverage risk.

Return on Equity (ROE)

ROE demonstrates some volatility, declining sharply from 9.44% in 2020 to 7.01% in 2021, recovering to 9.59% in 2022, then dipping again near 7.3% in 2023 and 2024. By 2025, ROE rises again to 9.71%. This pattern illustrates fluctuations in net profitability and efficiency in generating returns on shareholders’ equity.

Net Profit Margin

The net profit margin exhibited variability over the observed period. It started at 16.56% in 2020 and declined to 11.97% in 2021. A recovery occurred in 2022 with an increase to 15.9%, followed by a downward trend reaching 11.36% in 2024. The margin showed improvement again in 2025, rising to 13.9%. Overall, the net profit margin demonstrates fluctuations with a tendency to oscillate between approximately 11% and 16%, signaling variations in profitability efficiency across the years.

Asset Turnover

The asset turnover ratio showed a general upward trend over the timeframe. Beginning at 0.32 in 2020 and remaining stable through 2021, it increased modestly to 0.35 in 2022. Subsequent years saw incremental advances, reaching 0.37 by 2025. This suggests gradually improving effectiveness in utilizing assets to generate sales, reflecting better operational efficiency or asset management initiatives.

Return on Assets (ROA)

The return on assets metric displayed a pattern similar to net profit margin with notable fluctuations. Starting at 5.28% in 2020, it declined to 3.87% in 2021, rebounded to 5.54% in 2022, then declined again to a range near 4% in 2023 and 2024. By 2025, ROA increased to 5.09%. These changes imply periods of varying asset profitability, potentially linked to changing net income and asset base dynamics, with a general recovery trend by the end of the period.

Tax Burden

The tax burden ratio demonstrates a general decreasing trend from 1.19 in 2020 to a low of 0.7 in 2023, followed by a slight increase to 0.83 by 2025. This suggests that the effective tax rate impacting net income has been reducing over the earlier periods, potentially enhancing profitability, before marginally rising again in the last two years.

Interest Burden

The interest burden ratio shows a gradual improvement from 0.79 in 2020 to 0.91 in 2022, indicating decreased interest expenses relative to earnings before interest and taxes (EBIT). This slightly dips to 0.87 in 2024 but recovers to 0.88 in 2025, reflecting relatively stable and efficient management of interest costs over time.

EBIT Margin

The EBIT margin percentage exhibits fluctuations, starting at 17.74% in 2020, declining to 15.92% in 2021, then rising to a peak of 19.13% in 2023. It decreases noticeably to 17.08% in 2024, before improving again to 18.87% in 2025. This pattern suggests volatility in operating profitability, with periods of both expansion and contraction.

Asset Turnover

Asset turnover ratio indicates a consistent upward trend, from 0.32 in 2020 and 2021 to 0.37 in 2025. This steady increase implies improving efficiency in utilizing assets to generate sales over the period analyzed.

Return on Assets (ROA)

ROA fluctuates over the years, starting at 5.28% in 2020, declining to 3.87% in 2021, rebounding to 5.54% in 2022, then dropping again to around 4.1% in 2023 and 2024, before increasing to 5.09% in 2025. These variations appear linked to the movements in EBIT margin and asset turnover, indicating variable profitability in generating returns from assets across periods.

Tax Burden

The tax burden ratio shows a generally decreasing trend from 1.19 in April 2020 to a low of 0.7 in April 2023. This decline indicates an improving tax efficiency or possibly tax rate reductions over this period. From April 2023 onwards, the ratio slightly increased to 0.76 in April 2024 and further to 0.83 in April 2025, suggesting a modest reversal in tax burden levels.

Interest Burden

The interest burden ratio improved from 0.79 in April 2020 to a peak of 0.91 in April 2022, indicating enhanced capacity to cover interest expenses or lower interest costs during this timeframe. After this peak, the ratio slightly decreased but remained relatively stable, around 0.87 to 0.89 between April 2023 and April 2025, signifying the company maintained a consistent interest burden position in recent years.

EBIT Margin

The EBIT margin fluctuated over the years, starting at 17.74% in April 2020, dropping to 15.92% in April 2021, then recovering robustly to 19.13% in April 2023. This indicates variability in operational profitability, with a notable peak in 2023. However, after the peak, the margin decreased to 17.08% in April 2024 before slightly rebounding to 18.87% in April 2025, reflecting some operational cost pressures or changes in revenue mix impacting profitability.

Net Profit Margin

The net profit margin experienced a marked decline from 16.56% in April 2020 to 11.36% in April 2024, indicating pressure on bottom-line profitability during these years. There was a partial recovery in April 2022 to 15.9%, but the overall trend until 2024 was downward. By April 2025, the margin improved to 13.9%, suggesting a gradual enhancement in net profit generation, although still below earlier peak levels.