Texas Instruments Incorporated (TXN)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 58.14% | 62.90% | 68.76% | 67.47% | 64.10% |
| Operating profit margin | 34.94% | 41.85% | 50.63% | 48.84% | 40.76% |
| Pretax margin | 34.86% | 42.34% | 50.09% | 48.62% | 41.61% |
| Net profit margin | 30.68% | 37.16% | 43.68% | 42.35% | 38.69% |
Texas Instruments Incorporated has displayed a generally positive trend in terms of profitability ratios over the period from December 31, 2020, to December 31, 2024.
- The Gross Profit Margin has shown an increasing trend from 64.10% in 2020 to 68.76% in 2022, indicating the company's ability to control production costs and generate higher profits from sales. However, there was a slight decrease to 58.14% in 2024, which may warrant further investigation.
- The Operating Profit Margin experienced consistent growth from 40.76% in 2020 to 50.63% in 2022, reflecting effective cost management and operational efficiency. Nevertheless, there was a decline to 34.94% in 2024, which could be a red flag for potential operational challenges.
- The Pretax Margin also saw a positive trajectory, increasing from 41.61% in 2020 to 50.09% in 2022, before dropping to 34.86% in 2024. This could suggest changes in tax strategies or operational performance affecting profitability.
- The Net Profit Margin exhibited a similar pattern of growth, rising from 38.69% in 2020 to 43.68% in 2022, yet decreasing to 30.68% in 2024. This decline may indicate challenges in maintaining bottom-line profitability amidst changing market conditions or cost structures.
Overall, while Texas Instruments has demonstrated strong profitability ratios over the period, the recent declines in margins suggest a potential need for closer examination of cost control measures and operational efficiencies to sustain profitability levels in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 15.39% | 22.66% | 37.27% | 36.31% | 30.46% |
| Return on assets (ROA) | 13.51% | 20.12% | 32.16% | 31.48% | 28.91% |
| Return on total capital | 35.27% | 43.39% | 70.29% | 68.27% | 67.56% |
| Return on equity (ROE) | 28.39% | 38.53% | 60.02% | 58.27% | 60.90% |
Texas Instruments Incorporated has shown a fluctuating trend in its profitability ratios over the five-year period from 2020 to 2024.
1. Operating return on assets (Operating ROA) has generally improved from 30.46% in 2020 to 37.27% in 2022, indicating an efficient management of operating assets to generate operating income. However, there was a decrease to 15.39% in 2024, which suggests a potential decline in operational efficiency.
2. Return on assets (ROA) also followed a similar pattern, increasing from 28.91% in 2020 to 32.16% in 2022 before dropping to 13.51% in 2024. This ratio reflects the company's overall profitability in relation to its total assets, indicating a decline in asset utilization efficiency in the last year.
3. Return on total capital peaked at 70.29% in 2022, showcasing the company's ability to generate profits from the total capital invested. However, there was a significant decrease to 35.27% in 2024, suggesting a decline in returns relative to the total capital employed.
4. Return on equity (ROE) also witnessed a downward trend, decreasing from 60.90% in 2020 to 28.39% in 2024. This indicates a decrease in the company's ability to generate profits from shareholders' equity over the years.
Overall, the profitability ratios of Texas Instruments Incorporated show a mixed performance, with improvements in certain years followed by declines in others. It is essential for the company to analyze the reasons behind these fluctuations and take necessary actions to maintain and enhance its profitability in the future.