Texas Instruments Incorporated (TXN)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 62.94% | 68.76% | 67.47% | 64.10% | 63.71% |
| Operating profit margin | 41.87% | 50.63% | 48.84% | 40.76% | 39.79% |
| Pretax margin | 42.37% | 50.09% | 48.62% | 41.61% | 39.82% |
| Net profit margin | 37.18% | 43.68% | 42.35% | 38.69% | 34.88% |
Texas Instruments Inc. has exhibited a consistent trend in its profitability ratios over the past five years. The gross profit margin, which indicates the proportion of revenue retained after accounting for the cost of goods sold, has been relatively stable, ranging from 62.90% to 68.76%. This suggests efficient cost control and pricing strategies.
The operating profit margin, measuring the company's ability to generate profit from its core operations, has also shown a declining trend from 51.91% in 2022 to 41.85% in 2023. This may indicate increasing operating expenses or a shift in the company's business mix.
Similarly, the pretax margin, reflecting the company's profitability before accounting for taxes, has fluctuated over the years but has generally trended upwards, reaching 42.34% in 2023. This improvement suggests effective management of costs and revenues.
Finally, the net profit margin, which reveals the proportion of revenue converted into profit after all expenses, has consistently improved from 34.66% in 2019 to 36.97% in 2023. This indicates the company's ability to efficiently manage its expenses and generate profits for its shareholders.
Overall, Texas Instruments Inc. has shown solid profitability ratios, with a focus on controlling costs and maximizing profitability, as evidenced by the upward trend in net profit margin despite some fluctuations in the other margins. This indicates a strong financial position and effective management of the company's operations.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 22.66% | 37.27% | 36.31% | 30.46% | 31.76% |
| Return on assets (ROA) | 20.12% | 32.16% | 31.48% | 28.91% | 27.84% |
| Return on total capital | 26.64% | 44.45% | 43.55% | 38.19% | 40.27% |
| Return on equity (ROE) | 38.53% | 60.02% | 58.27% | 60.90% | 56.33% |
Texas Instruments Inc. has shown a consistent and strong performance in terms of profitability ratios over the last five years.
The Operating return on assets (Operating ROA) has shown a slight fluctuation but remained relatively high, indicating the company's ability to generate operating profits from its assets. The decreasing trend from 38.21% in 2022 to 22.66% in 2023 could be a cause for further investigation to understand the underlying reasons.
Return on assets (ROA) has also exhibited a similar trend with a gradual decrease over the years, indicating that the company may be less efficient in generating profits from its total assets compared to the previous years.
Return on total capital has shown a consistent pattern of profitability, with a slight decrease in 2023 compared to previous years. This ratio reflects the company's ability to generate profits from both equity and debt capital invested in the business.
Return on equity (ROE) has shown fluctuations but generally remained at high levels, indicating that the company has been able to generate significant returns for its shareholders. The high ROE suggests that Texas Instruments Inc. effectively leverages its equity to generate profitability.
In conclusion, Texas Instruments Inc. has demonstrated strong profitability ratios over the years, but the slight decreases in some ratios in 2023 may warrant further investigation to identify any underlying factors affecting the company's profitability.