Texas Instruments Incorporated (TXN)

Operating return on assets (Operating ROA)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Operating income US$ in thousands 5,465,000 7,331,000 10,140,000 8,960,000 5,894,000
Total assets US$ in thousands 35,509,000 32,348,000 27,207,000 24,676,000 19,351,000
Operating ROA 15.39% 22.66% 37.27% 36.31% 30.46%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $5,465,000K ÷ $35,509,000K
= 15.39%

Operating Return on Assets (Operating ROA) is a key financial ratio that measures a company's ability to generate earnings from its operational activities relative to its total assets. Looking at the trend for Texas Instruments Incorporated over the past five years, we observe the following:

- In December 2020, the operating ROA was 30.46%, indicating that the company was earning approximately 30.46 cents in operating income for every dollar of assets it had.
- By December 2021, the operating ROA had increased to 36.31%, demonstrating improved operational efficiency and asset utilization.
- The trend continued in December 2022, with the operating ROA further increasing to 37.27%, reflecting continued strength in the company's ability to generate operating profits from its asset base.
- However, in December 2023, there was a notable decline in the operating ROA to 22.66%, suggesting a decrease in the company's operational performance relative to its asset base.
- This decline continued into December 2024, where the operating ROA dropped to 15.39%, indicating a further decrease in the company's ability to generate operating income from its assets, which may raise concerns about asset efficiency and operational profitability.

Overall, the trend in Texas Instruments Incorporated's operating ROA shows fluctuations, with periods of improvement followed by declines. It is essential for the company to assess the factors influencing these fluctuations to ensure sustainable operational performance and efficient asset utilization in the future.