Twitter Inc. (NYSE:TWTR)

The financial ratios over the period indicate significant fluctuations and trends in operational efficiency, liquidity, leverage, and profitability.

Total Asset Turnover

Reported total asset turnover shows a slight decrease from 0.33 in 2017 to 0.27 in 2019, followed by a modest recovery to 0.36 in 2021. The adjusted total asset turnover, which removes certain effects, reveals a more stable pattern, dipping from 0.31 in 2017 to 0.29 in 2020 but then improving substantially to 0.39 in 2021. This suggests improved efficiency in using assets to generate revenue in the latest year.

Current Ratio

Both reported and adjusted current ratios display high volatility, with values initially very high (over 9) in 2017 and 2019, dropping significantly in 2018 and 2020 to around 4.5, then increasing again in 2021 to roughly 6. This pattern indicates fluctuating short-term liquidity, with a decline mid-period and some recovery more recently, but still below the extreme liquidity levels seen in early years.

Debt to Equity and Debt to Capital Ratios

There is a clear upward trend in leverage metrics. Reported debt to equity rose from 0.36 in 2017 to 0.58 in 2021, while adjusted figures show a similar progression, increasing from 0.46 to 0.89. Debt to capital ratios also climbed steadily, with reported ratios moving from 0.26 to 0.37 and adjusted figures from 0.32 to 0.47. This points to a progressively higher reliance on debt financing over the observed period.

Financial Leverage

Financial leverage ratios increased consistently, with reported values moving from 1.47 in 2017 to 1.92 in 2021, and adjusted values rising from 1.57 to 2.07. The trend indicates growing use of debt relative to equity, amplifying the risk profile but potentially enhancing returns if managed effectively.

Profitability Indicators (Net Profit Margin, ROE, ROA)

Profitability experienced significant instability. Reported net profit margin was negative in 2017 (-4.42%), positive and high in 2018 and 2019 (over 39% and 42%), then sharply negative again in 2020 (-30.56%) and improving but negative in 2021 (-4.36%). Adjusted net profit margin shows a more conservative and less volatile pattern but follows a similar downward trend in the later years.

Return on equity (ROE) mirrors this pattern; reported ROE jumps from -2.14% in 2017 to highs over 16-17% in 2018-2019, then declines to negative territory by 2020 and 2021. Adjusted ROE figures are consistently lower and less volatile but also move into negative values toward the end of the period.

Return on assets (ROA) follows the same trend, with reported ROA peaking at around 11.5% in 2018-2019 before dropping to negative figures by 2020 and 2021. Adjusted ROA remains positive but low in earlier years and turns negative by 2021, indicating declining asset profitability.

Overall, the data depict a company experiencing variable operational efficiency and liquidity, a marked increase in leverage, and significant volatility in profitability metrics, with a particularly sharp deterioration in financial performance beginning in 2020. Improvements in asset turnover and liquidity in 2021 are noted, but profitability and leverage figures suggest challenges remain.

Revenue Trends

Revenue shows a consistent upward trajectory throughout the period from 2017 to 2021. Starting at approximately 2.44 billion US dollars in 2017, revenue increased steadily each year, reaching a significant peak of about 5.08 billion US dollars in 2021. This represents more than a twofold increase over five years, indicating strong sales growth.

Total Assets

Total assets also increased consistently over the analyzed period, moving from roughly 7.41 billion US dollars in 2017 to approximately 14.06 billion US dollars by the end of 2021. The asset base nearly doubled, reflecting ongoing investments or acquisitions that expanded the company's asset structure.

Reported Total Asset Turnover Ratio

The reported total asset turnover ratio demonstrates some fluctuations but shows a general decline from 0.33 in 2017 to a low of 0.27 in 2019. Thereafter, it marginally improved to 0.28 in 2020 and rose more substantially to 0.36 in 2021. This indicates that asset efficiency initially deteriorated but improved notably in the final year, suggesting the company was able to generate more revenue per unit of asset in 2021.

Adjusted Revenue and Adjusted Total Assets

Adjusted revenue follows a similar growth trend as reported revenue but with slightly higher values, starting at about 2.44 billion in 2017 and climbing to approximately 5.09 billion in 2021. Adjusted total assets show an increase as well, moving from approximately 7.95 billion in 2017 to about 12.93 billion in 2021. This adjusted data highlights a slightly different asset base, potentially excluding certain elements to provide a cleaner measure of operational assets.

Adjusted Total Asset Turnover Ratio

The adjusted total asset turnover ratio is more stable but still indicates fluctuations. It starts at 0.31 in 2017, decreases to 0.30 in 2018, then rises to 0.32 in 2019, dips again to 0.29 in 2020, and peaks at 0.39 in 2021. The trend suggests periods of both declining and improving efficiency, with a marked improvement in the last year, consistent with the reported turnover ratio trend.

Overall Insights

The company has shown robust revenue growth alongside expansion in asset base, almost doubling both metrics over five years. Asset turnover ratios, both reported and adjusted, reveal fluctuating efficiency in asset utilization, with the most recent year marking a significant recovery or enhancement in generating revenue from assets. This could suggest operational improvements, better asset management, or revenue growth outpacing asset accumulation in 2021.

Current Assets

The current assets show an overall upward trend from 5,321,884 thousand US dollars in 2017 to a peak of 8,637,108 thousand US dollars in 2020, before experiencing a decline to 7,918,370 thousand US dollars in 2021. This indicates that while the company increased its current asset base substantially over the period, there was a slight contraction in the last year observed.

Current Liabilities

Current liabilities fluctuated over the examined period. Starting at 583,278 thousand US dollars in 2017, they rose significantly to 1,516,311 thousand US dollars in 2018, then decreased to 832,476 thousand US dollars in 2019, followed by an increase to 1,952,826 thousand US dollars in 2020. In 2021, liabilities declined to 1,343,867 thousand US dollars. These variations suggest volatility in short-term obligations.

Reported Current Ratio

The reported current ratio shows considerable variation, falling from a very high 9.12 in 2017 to 4.69 in 2018, then surging again to 9.15 in 2019, dropping to 4.42 in 2020, and recovering modestly to 5.89 in 2021. The alternation between high and lower ratios reflects the changes in asset and liability balances, indicating periods of strong liquidity interspersed with pressure on liquidity.

Adjusted Current Assets

The adjusted current assets follow a trend similar to current assets, beginning at 5,327,314 thousand US dollars in 2017 and rising to a peak of 8,654,054 thousand US dollars in 2020, then falling to 7,933,648 thousand US dollars in 2021. This suggests that after adjustment, the asset base shows the same pattern of growth followed by slight contraction in the last year.

Adjusted Current Liabilities

Adjusted current liabilities move broadly in line with reported current liabilities, starting at 555,454 thousand US dollars in 2017, increasing markedly to 1,477,362 thousand US dollars in 2018, decreasing to 763,489 thousand US dollars in 2019, rising again to 1,893,850 thousand US dollars in 2020, and decreasing to 1,265,326 thousand US dollars in 2021. The volatility aligns with fluctuating short-term liabilities, despite adjustments.

Adjusted Current Ratio

The adjusted current ratio presents a pattern consistent with the reported current ratio but at slightly higher levels. It decreased from 9.59 in 2017 to 4.82 in 2018, increased sharply to 9.98 in 2019, dropped to 4.57 in 2020, and improved to 6.27 in 2021. This indicates that liquidity, when adjusted, is generally stronger but still exhibits substantial fluctuations year over year.

Total Debt

Total debt demonstrates a consistent upward trend over the five-year period, increasing from approximately 1.79 billion US dollars in 2017 to over 4.25 billion US dollars by the end of 2021. Notably, there was a slight decrease from 2018 to 2019, after which debt levels rose substantially through 2020 and 2021.

Stockholders’ Equity

Stockholders’ equity also increased steadily from around 5.05 billion US dollars in 2017 to a peak of approximately 8.7 billion US dollars in 2019. Subsequently, equity declined over the next two years, falling to about 7.3 billion US dollars in 2021, indicating potential distribution to shareholders, losses, or other equity-reducing events during this period.

Reported Debt to Equity Ratio

This ratio generally fluctuated within a moderate range but showed an overall upward trajectory, moving from 0.36 in 2017 to 0.58 in 2021. The ratio dipped in 2019 to 0.29, coinciding with an equity peak, but increased sharply afterward, reflecting the growing debt burden relative to equity.

Adjusted Total Debt

Adjusted total debt, which likely accounts for additional liabilities or specific adjustments, follows a similar pattern to reported total debt but at higher levels throughout the period. It rose steadily from about 2.34 billion US dollars in 2017 to approximately 5.55 billion US dollars in 2021, showing an accelerating increase in debt obligations.

Adjusted Stockholders’ Equity

Adjusted equity figures start lower than reported equity in 2018 and remain below reported values across most years. There is growth from 2017 through 2020, peaking at roughly 7.25 billion US dollars in 2020, followed by a decrease to around 6.25 billion in 2021. The adjusted figures indicate a somewhat lower equity base when certain adjustments are considered.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio reveals a more pronounced increase compared to the reported ratio. Beginning at 0.46 in 2017, it increases to 0.89 by 2021. This sharp rise suggests the company's leverage intensified, with debt growing faster relative to adjusted equity, particularly from 2020 to 2021.

Total Debt

The total debt exhibited a general upward trend over the five-year period, rising from approximately 1.79 billion US dollars at the end of 2017 to about 4.25 billion US dollars by the end of 2021. There was a slight decrease in 2019 compared to 2018, but the overall trajectory remained increasing.

Total Capital

Total capital increased steadily from around 6.84 billion US dollars in 2017 to about 11.56 billion US dollars in 2021. The growth rate appeared to slow somewhat in the final two years, with a marginal increase between 2020 and 2021.

Reported Debt to Capital Ratio

The reported debt to capital ratio fluctuated within the range of 0.23 to 0.37, starting at 0.26 in 2017, dipping to a low of 0.23 in 2019, then rising consistently through 2020 and 2021 to reach 0.37. This pattern suggests a relative increase in leverage after a brief period of deleveraging in 2019.

Adjusted Total Debt

The adjusted total debt, which may include off-balance-sheet liabilities or other adjustments, mirrored the increasing trend of total debt, rising from 2.34 billion US dollars in 2017 to approximately 5.55 billion US dollars in 2021. There was a slight decrease in 2019 relative to 2018, but the overall trend was upward.

Adjusted Total Capital

Adjusted total capital showed an overall increase from about 7.41 billion US dollars in 2017 to approximately 11.80 billion US dollars in 2021. Growth was relatively steady, with a notable increase between 2019 and 2020.

Adjusted Debt to Capital Ratio

This ratio also demonstrated an upward trend, climbing from 0.32 in 2017 to 0.47 in 2021. The ratio declined between 2018 and 2019 but increased significantly in 2020 and continued its rise into 2021, indicating growing leverage when adjustments are considered.

The financial data reveals several notable trends over the five-year period ending December 31, 2021. Both total assets and adjusted total assets show a consistent upward trajectory, indicating an overall expansion in the company's asset base. Total assets increased from approximately 7.41 billion US dollars in 2017 to around 14.06 billion US dollars in 2021, reflecting significant growth. Similarly, adjusted total assets grew from approximately 7.95 billion to 12.93 billion US dollars during the same period, albeit with a lesser magnitude of growth compared to total assets.

In contrast, stockholders’ equity and adjusted stockholders’ equity demonstrate a more variable pattern. Stockholders’ equity increased steadily from 5.05 billion US dollars in 2017 to a peak of about 8.70 billion US dollars in 2019. However, it then decreased to 7.97 billion in 2020 and further declined to 7.31 billion US dollars by 2021. Adjusted stockholders’ equity also followed a rising trend until 2020, from 5.07 billion in 2017 to 7.25 billion US dollars, with a decrease occurring in 2021 down to 6.25 billion US dollars. The declines in equity values in the latter years may indicate increased losses, dividends, share repurchases, or other equity-reducing activities.

Reported financial leverage, calculated as the ratio of total assets to stockholders' equity, remained relatively stable around 1.46 to 1.49 from 2017 through 2019. Starting in 2020, a noticeable increase occurred, reaching 1.92 by 2021. This rise suggests the company has taken on more debt relative to equity, potentially enhancing financial risk. Adjusted financial leverage mirrored this trend but is consistently higher than reported financial leverage, going from 1.57 in 2017 to 2.07 in 2021, reinforcing the observation of greater reliance on liabilities or adjusted obligations over time.

Overall, the data indicates asset growth alongside declining equity in the last two years, leading to increased financial leverage. This suggests a strategic shift toward higher leverage, which might impact the company's risk profile and cost of capital going forward.

Total Assets

Grew steadily from $7.41 billion in 2017 to $14.06 billion in 2021.

Adjusted Total Assets

Increased from $7.95 billion in 2017 to $12.93 billion in 2021; growth rate slower than total assets.

Stockholders’ Equity

Rose to a peak of $8.70 billion in 2019, then declined to $7.31 billion by 2021.

Adjusted Stockholders’ Equity

Increased to $7.25 billion in 2020, followed by a decline to $6.25 billion in 2021.

Reported Financial Leverage

Stable near 1.46-1.49 until 2019, then increased to 1.92 by 2021.

Adjusted Financial Leverage

Consistently higher than reported leverage, rising from 1.57 in 2017 to 2.07 in 2021.

Revenue Trends

The revenue consistently increased over the five-year period from 2017 to 2021. Starting at approximately $2.44 billion in 2017, it rose steadily each year, reaching about $5.08 billion in 2021. This demonstrates a robust growth trajectory, with the most significant jump observed between 2020 and 2021.

Net Income (Loss) and Profitability

Net income showed considerable volatility. The company experienced a loss of approximately $108 million in 2017, followed by strong profitability in 2018 and 2019, with net incomes of approximately $1.21 billion and $1.47 billion respectively. However, this trend reversed sharply in 2020 and 2021, with losses of approximately $1.14 billion and $221 million, which indicates financial instability in the latter years despite increased revenue.

Reported Net Profit Margin

The reported net profit margin mirrored the net income trend. It was negative at -4.42% in 2017, peaked positively at 39.63% and 42.37% in 2018 and 2019 respectively, then plummeted to -30.56% in 2020 and improved slightly but remained negative at -4.36% in 2021. This pattern reflects significant swings in profitability relative to revenue during the period.

Adjusted Net Income and Profit Margin

The adjusted net income followed a more moderate trend compared to the reported net income. It started negative at approximately -$84 million in 2017, improved to $379 million in 2018 and $367 million in 2019, then returned to negative territory in 2020 and 2021 at -$59 million and -$486 million respectively. The adjusted net profit margin, consistently lower than the reported margin, ranged from -3.46% in 2017 to positive values in 2018 and 2019 (12.43% and 10.51%) before falling back to negative margins in 2020 and 2021 (-1.59% and -9.54%). These adjusted figures suggest that underlying operational profitability faced challenges in the latter years despite revenue growth.

Overall Analysis

While revenue growth was strong and steady over the analyzed years, profitability exhibited significant fluctuations with notable losses in the years 2020 and 2021. The adjusted figures indicate that the negative profitability in recent years was not solely due to exceptional or one-time items, implying operational challenges. The disparity between the peak profit margins in 2018-2019 and the losses in subsequent years suggests a shift in cost structure, market conditions, or other factors adversely impacting financial performance.

Net Income (Loss)

The net income exhibited significant volatility over the analyzed period. Starting with a loss of approximately $108 million in 2017, the company swiftly moved to substantial profitability in 2018 and 2019, achieving net incomes of around $1.2 billion and $1.5 billion respectively. However, this positive trend reversed sharply in 2020, resulting in a net loss exceeding $1.1 billion, followed by a smaller net loss of approximately $221 million in 2021. This pattern indicates a period of strong earnings growth, followed by considerable financial challenges in the latter years.

Stockholders’ Equity

Stockholders’ equity consistently increased from 2017 through 2019, rising from roughly $5 billion to about $8.7 billion. In 2020, equity experienced a decline to nearly $8 billion and continued to diminish in 2021 to approximately $7.3 billion. Despite the decrease, the overall level remains higher relative to the starting point, reflecting accumulation of retained earnings and possibly other equity changes, though recent declines suggest financial pressure or shareholder payouts.

Reported Return on Equity (ROE)

The reported ROE mirrored net income trends, showing negative returns in 2017 (-2.14%), a strong recovery in 2018 (17.71%) and 2019 (16.84%), followed by a notable decline into negative territory in 2020 (-14.25%) and a moderate negative return in 2021 (-3.03%). These fluctuations indicate variability in the company’s profitability relative to equity, with positive performance concentrated in the mid-period and deteriorated returns during the most recent years.

Adjusted Net Income (Loss)

Adjusted net income, presumably excluding certain one-time or non-operational items, also displayed volatility but with lower magnitude compared to reported net income. The adjusted results moved from a loss of about $84 million in 2017 to gains nearing $379 million in 2018 and $367 million in 2019. Subsequently, the adjusted net income registered smaller losses in 2020 (-$59 million) and larger losses in 2021 (-$486 million). This suggests that while the adjusted profitability was more stable than reported figures, the company still encountered consistent challenges in the latest periods.

Adjusted Stockholders’ Equity

The adjusted equity figures trended upward from 2017 through 2020, increasing from approximately $5.1 billion to about $7.3 billion, similar to the reported equity but with a steadier growth pattern. In 2021, adjusted equity decreased to around $6.3 billion, indicating some contraction in equity base under adjusted accounting. The adjusted equity level still reflects a firm foundation but reduced capital strength in the final year observed.

Adjusted Return on Equity (Adjusted ROE)

The adjusted ROE was negative in 2017 (-1.67%), improved to positive but moderate levels in 2018 (6.28%) and 2019 (5.34%), and then declined close to zero with a slight loss in 2020 (-0.81%) and more significant negative returns in 2021 (-7.77%). This adjusted profitability metric, accounting for exclusions, confirms a pattern of subdued financial performance in recent years, contrasting with healthier returns in the intermediate years.

Net Income (Loss)

The net income experienced significant fluctuations over the five-year period. In 2017, the company recorded a substantial loss of approximately 108 million USD. This was followed by a sharp improvement in 2018 and 2019, with net income rising to over 1.2 billion USD and 1.46 billion USD, respectively. However, this positive trend reversed abruptly in 2020, with a loss exceeding 1.1 billion USD, and although the loss decreased in 2021 to around 221 million USD, profitability was not restored.

Total Assets

Total assets demonstrated consistent growth throughout the period, increasing from about 7.4 billion USD in 2017 to approximately 14.1 billion USD by the end of 2021. This steady increase indicates continued asset accumulation or investment despite fluctuations in profitability.

Reported Return on Assets (ROA)

The reported ROA mirrored net income trends, showing negative returns in 2017 (-1.46%) and sharp positive returns in 2018 (11.86%) and 2019 (11.54%). This was followed by a sharp decline into negative territory in 2020 (-8.49%) and a slight improvement in 2021 (-1.57%), reflecting periods of both strong profitability and substantial losses relative to asset base.

Adjusted Net Income (Loss)

Adjusted net income, which likely excludes certain non-recurring items, also showed volatility but with less pronounced magnitude than the reported figures. Starting with a loss in 2017 (-84 million USD), adjusted income improved markedly in 2018 (379 million USD) and remained positive in 2019 (367 million USD). Losses reappeared in 2020 (-59 million USD) and deepened in 2021 (-486 million USD), suggesting challenges persisted even after adjustments.

Adjusted Total Assets

Adjusted total assets rose steadily from nearly 7.95 billion USD in 2017 to about 12.9 billion USD in 2021, reinforcing the observation of asset growth when adjusting for possible factors excluded from the reported figures.

Adjusted ROA

The adjusted ROA remained modest throughout the period, ranging from a loss of -1.06% in 2017 to a peak of 3.75% in 2018 and 3.4% in 2019. It decreased to slightly negative values in 2020 (-0.47%) and further declined to -3.76% in 2021, indicating limited profitability on the asset base after adjustments, especially during the most recent years.

Summary

The data reveals a pattern of volatility in profitability, with a peak in 2018 and 2019 followed by a notable decline in 2020 and 2021. Despite this, the asset base expanded steadily, suggesting ongoing investment or acquisition of resources. The adjusted figures imply that even when excluding certain items, the company faced profitability challenges in the later years. Returns on assets were positive only during the middle years and deteriorated sharply afterwards. The overall financial trends indicate a period marked by significant operational difficulties following an earlier phase of strong earnings.