Broadcom Inc. (NASDAQ:AVGO)

Total Asset Turnover

The reported and adjusted total asset turnover ratios exhibit an overall increasing trend from 2019 to 2023, rising from 0.33 in 2019 to a peak of 0.49 in 2023. However, there is a notable decline in 2024, where both ratios fall back to 0.31. This indicates an improvement in the efficiency of asset utilization over the first five years, followed by a reduction in the latest period measured.

Debt to Equity

Both reported and adjusted debt to equity ratios show fluctuations over the years. The ratios start at approximately 1.32 in 2019 and increase sharply to around 1.72 by 2020. Subsequently, they vary slightly but generally maintain a high leverage level above 1.5 through 2023. In 2024, however, there is a marked decrease to near or below 1 (1.00 reported and 0.95 adjusted), suggesting a significant deleveraging or equity increase in that year.

Debt to Capital

The debt to capital ratios follow a pattern similar to debt to equity, starting at around 0.56–0.57 in 2019, peaking near 0.64 in 2022, and then decreasing to around 0.49–0.50 in 2024. This reflects a reduction in the proportion of capital financed by debt during the latest period after several years of elevated leverage.

Financial Leverage

Financial leverage ratios demonstrate a rising trend from 2.71 to around 3.23 between 2019 and 2022, indicating increased use of debt relative to equity. Following 2022, both reported and adjusted leverage gradually decline to 2.45 and 2.29 respectively by 2024, aligning with the observed decreases in debt-related ratios.

Net Profit Margin

The reported net profit margin rises significantly from 12.05% in 2019 to a peak of 39.31% in 2023. Similarly, the adjusted net profit margin increases from 8.9% to 38.63% over the same period. Both margins sharply decline in 2024 to 11.43% (reported) and 16.00% (adjusted), indicating a substantial reduction in profitability in the most recent year.

Return on Equity (ROE)

ROE shows a strong upward trajectory from 2019 through 2023. Reported ROE increases from 10.92% to 58.7%, and adjusted ROE increases from 7.58% to 59.41%, reflecting enhanced effectiveness in generating shareholder returns. Nonetheless, 2024 reveals a significant decline to 8.71% (reported) and 11.4% (adjusted), which may signal challenges impacting profitability or capital structure changes in that year.

Return on Assets (ROA)

ROA steadily improves from 2019 to 2023, with reported values increasing from 4.04% to 19.33% and adjusted values rising from 2.95% to 18.99%. This trend indicates growing efficiency in asset utilization to generate profits. However, in 2024, the ratios diminish sharply to 3.56% (reported) and 4.98% (adjusted), consistent with the declines observed in other profitability metrics.

Overall Trends and Insights

The data reflects a pattern of enhanced operational efficiency, profitability, and leverage from 2019 through 2023, marked by increases in asset turnover, profit margins, and returns on equity and assets. Debt levels and financial leverage also rose during this period, suggesting increased borrowing to support growth or investments. In 2024, a reversal is evident across most financial indicators including a reduction in asset turnover, deleveraging, and declining profitability. This could be indicative of a strategic shift, possibly related to risk management, market conditions, or changes in business performance.

Net Revenue

Net revenue demonstrated a consistent upward trajectory from 2019 through 2023, increasing from $22,597 million to $35,819 million. The most significant growth occurred between 2023 and 2024, where net revenue surged to $51,574 million, reflecting a sharp acceleration in sales or service income in the latest period.

Total Assets

Total assets showed steady growth from 2019, moving from $67,493 million to roughly $72,861 million by 2023, indicating stable asset base expansion. However, a notable increase was observed in 2024, with total assets rising substantially to $165,645 million. This jump suggests significant asset acquisitions, investments, or revaluations during the last year analyzed.

Reported Total Asset Turnover

The reported total asset turnover ratio reflected a downward trend initially, declining from 0.33 in 2019 to 0.31 in 2020. Subsequently, there was an improving trajectory through 2022 and 2023, increasing to 0.49, which indicates enhanced efficiency in using assets to generate revenue. Nevertheless, this ratio decreased sharply to 0.31 in 2024, despite the considerable increase in net revenue, suggesting that asset growth outpaced revenue growth in that year.

Adjusted Total Assets and Adjusted Total Asset Turnover

The values for adjusted total assets and the adjusted total asset turnover ratio mirrored the reported figures exactly throughout all periods. This alignment indicates consistency between reported and adjusted measures with no significant adjustments applied, allowing direct comparisons and confirming the trends identified in total assets and asset turnover ratios.

The financial data over the six-year period reveals several notable trends in the company’s capitalization structure, particularly concerning debt levels, equity, and their respective ratios.

Total Debt

Total debt showed a generally increasing trend from 32,798 million USD in 2019 to 41,062 million USD in 2020. It then slightly declined across 2021 to 2023, fluctuating between approximately 39,200 million and 39,700 million USD. A sharp increase occurred in 2024, with total debt rising significantly to 67,566 million USD, indicating a substantial raise in debt financing during the latest period.

Stockholders’ Equity

Stockholders’ equity started at 24,941 million USD in 2019, experienced a decrease by 2020 to 23,874 million USD, then showed minor fluctuations around the 23,000 to 25,000 million USD range through 2023. In 2024, equity surged markedly to 67,678 million USD, paralleling the large increase in debt, which suggests a capital restructuring or an injection of equity capital.

Reported Debt to Equity Ratio

The reported debt to equity ratio increased from 1.32 in 2019 to a peak of 1.74 in 2022, reflecting greater leverage over this period. In 2023, it slightly declined to 1.64, followed by a pronounced drop to 1.00 in 2024. This sudden reduction corresponds with the simultaneous rise in equity and total debt, indicating a more balanced capital structure as of the last period.

Adjusted Total Debt

The adjusted total debt mirrors the trend of reported total debt, starting at 33,447 million USD in 2019, peaking in 2020 at 41,689 million USD, then marginally decreasing through 2023 before a sharp rise to 68,916 million USD in 2024. This consistency between reported and adjusted figures supports the reliability of the debt trend.

Adjusted Stockholders’ Equity

Adjusted equity decreased from 26,530 million USD in 2019 to 24,237 million USD in 2020 and remained relatively stable around 22,000 to 23,000 million USD until 2023. A significant increase to 72,338 million USD in 2024 indicates a substantial enhancement in equity position under the adjusted measure, aligning closely with the reported equity increase.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio rose from 1.26 in 2019 to a peak of 1.81 in 2022, reflecting increased leverage, then marginally declined to 1.70 in 2023. In 2024, it dropped considerably to 0.95, underscoring a major shift towards reduced leverage and a stronger equity base in the company’s capital structure.

In summary, the overall trend from 2019 to 2023 shows increasing leverage as debt levels rose relative to equity. However, the year 2024 marks a pivotal change, with substantial increases in both debt and equity and a resulting reduction in debt-to-equity ratios. This suggests a strategic repositioning of the capital structure that reduces financial risk by balancing debt with a significantly strengthened equity base.

Total debt

The total debt increased significantly from 32,798 million USD in late 2019 to a peak around 41,062 million USD in late 2020. Subsequently, it showed a slight downward trend over the next three years, reaching approximately 39,229 million USD by late 2023. However, in late 2024, there was a sharp increase in total debt to 67,566 million USD, representing a substantial rise compared to previous years.

Total capital

Total capital exhibited a generally stable trend with minor fluctuations, starting at 57,739 million USD in late 2019 and increasing gradually to about 64,936 million USD in late 2020. It then experienced a slight decline and stabilization around 62,000 to 63,000 million USD between late 2022 and 2023. In late 2024, it dramatically increased to 135,244 million USD, more than doubling the amounts observed in prior years.

Reported debt to capital ratio

This ratio illustrates the proportion of debt relative to total capital. It rose from 0.57 in 2019 to a high of 0.64 in 2022, indicating an increasing leverage during this period. After a minor decrease to 0.62 in 2023, it dropped significantly to 0.50 in 2024, suggesting a proportionally lower reliance on debt within the expanded capital base.

Adjusted total debt

Adjusted total debt closely follows the trend of reported total debt, starting slightly above at 33,447 million USD in 2019 and peaking near 41,689 million USD in 2020. It remained relatively steady, marginally declining each year thereafter, followed by a sharp increase to 68,916 million USD in 2024. The adjustment does not materially alter the overall trend but aligns with the reported values.

Adjusted total capital

Adjusted total capital starts higher than the reported total capital in 2019 at 59,977 million USD. It reaches a maximum of about 65,926 million USD in 2020 before gradually decreasing and stabilizing around 62,000 to 63,000 million USD through 2023. By 2024, it displays a pronounced surge to 141,254 million USD, consistent with the reported capital's substantial increase.

Adjusted debt to capital ratio

The adjusted debt to capital ratio shows a similar pattern to the reported ratio, increasing from 0.56 in 2019 to a peak of 0.64 in 2022. It then slightly decreases to 0.63 in 2023 before falling significantly to 0.49 in 2024. This suggests that despite the large increase in both adjusted debt and capital in 2024, the proportion of debt relative to capital has decreased, implying improved leverage metrics under the adjusted figures.

Overall trends and insights

Over the five-year period, both total and adjusted debt exhibited an initial rise followed by a plateau and slight decline, only to surge dramatically in the final year. Total and adjusted capital generally remained stable until the last reported year, when they more than doubled. Both debt-to-capital ratios increased until around 2022, indicating heightened leverage, but then significantly decreased in 2024, reflecting a realignment towards lower leverage levels amidst the large scale-up in capital. The pronounced increases in debt and capital in the most recent period suggest a major corporate financing event or structural change impacting the company's capital structure.

The analysis of the financial data over the periods reveals several notable trends in asset levels, equity positions, and financial leverage ratios.

Total Assets

Total assets demonstrated a relatively stable pattern from 2019 through 2023, fluctuating slightly between approximately $67.5 billion and $73 billion. However, in the most recent period ending November 3, 2024, there is a significant increase, with total assets more than doubling to approximately $165.6 billion. This suggests a major acquisition, capital investment, or asset revaluation occurring in that timeframe.

Stockholders’ Equity

Stockholders’ equity shows a generally stable to slightly declining trend from 2019 ($24.9 billion) through 2022 ($22.7 billion), recovering somewhat in 2023 ($24 billion). Similar to total assets, equity experiences a substantial increase by 2024, reaching about $67.7 billion, which aligns with the surge in total assets. The increase in equity indicates either retained earnings accumulation or new equity issuance supporting asset growth.

Reported Financial Leverage

The reported leverage ratio, which compares total assets to equity, indicates a moderate increase from 2.71 in 2019 to a peak of 3.23 in 2022, followed by a slight decline to 3.04 in 2023. In 2024, the ratio notably decreases to 2.45, reflecting a proportionally higher increase in equity relative to assets. This suggests a reduction in financial risk or stronger capitalization in the most recent period.

Adjusted Total Assets

Adjusted total assets mirror the reported total assets closely over the first five periods, with identical figures. In 2024, adjusted total assets also reflect the substantial jump to $165.6 billion, confirming that adjustments did not materially alter the asset base valuation.

Adjusted Stockholders’ Equity

Adjusted equity values follow a similar pattern to reported equity, showing stability around $24 billion through 2023, and a marked increase to $72.3 billion in 2024, slightly higher than the reported figure. This indicates conservative equity adjustments enhancing the equity base valuation.

Adjusted Financial Leverage

Adjusted financial leverage rises from 2.57 in 2019 to a peak of 3.31 in 2022, then drops to 3.13 in 2023, consistent with reported leverage trends. The sharp decline to 2.29 in 2024 suggests an improved capital structure with less reliance on debt or liabilities relative to equity, post-adjustments.

Overall, the financial data indicates a period of relatively stable asset and equity levels with moderate leverage from 2019 to 2023, followed by a transformative event in 2024 leading to a significant increase in the company’s asset base and equity. This event also corresponded with a reduction in financial leverage ratios, pointing to a stronger equity position and potentially lower financial risk. Such changes may have important implications for the company’s financial strategy, risk profile, and investment capacity going forward.

The financial data over the reported periods reveals several notable trends and fluctuations in both revenue and profitability metrics.

Net Revenue

There has been a consistent upward trajectory in net revenue from 2019 through 2024. Starting at approximately 22.6 billion USD in 2019, revenue increased steadily each year, reaching over 51.5 billion USD by 2024. This indicates a strong growth in sales or service income over the six-year period, with particularly significant jumps in the last two recorded years.

Net Income

Net income displayed a generally increasing trend from 2019 to 2023, rising from about 2.7 billion USD to a peak of nearly 14.1 billion USD in 2023. However, there is a marked decline in 2024, with net income dropping sharply to approximately 5.9 billion USD. This suggests potential challenges or extraordinary expenses impacting profitability despite the growth in revenue.

Reported Net Profit Margin

The reported net profit margin more than tripled from around 12% in 2019 to nearly 39.3% in 2023, reflecting improved profitability relative to sales over this period. Yet, in 2024, this margin declines significantly to 11.43%, nearly returning to 2019 levels. This disproportional reduction relative to revenue growth indicates that increased expenses or other factors have eroded net profits substantially in the most recent year.

Adjusted Net Income

Adjusted net income follows a similar pattern to reported net income but with some variations. After a dip from 2.0 billion USD in 2019 to 1.8 billion USD in 2020, adjusted net income climbs sharply to 13.8 billion USD in 2023 before declining to 8.25 billion USD in 2024. The less pronounced decline relative to reported net income in 2024 may suggest adjustments were made to exclude some non-recurring expenses or losses.

Adjusted Net Profit Margin

The adjusted net profit margin demonstrates substantial improvement from 8.9% in 2019 to 38.63% in 2023, paralleling the trend of strong profitability growth. However, like the reported margin, it decreases significantly to 16% in 2024. While this adjusted margin remains higher than in earlier years, the sharp drop indicates deteriorating profitability pressures even after adjustments.

In summary, the data reflects robust revenue growth over the analyzed period, accompanied by a considerable increase in net profitability through 2023. The margins indicate significant operational or cost efficiencies during this growth phase. Nonetheless, the pronounced declines in income and profitability margins in 2024, despite continuing revenue gains, suggest emerging financial challenges, possibly due to increased costs, market conditions, or other adverse factors affecting the company's earnings capacity.

Net Income

The net income exhibited substantial growth from 2019 through 2023, increasing from 2,724 million US dollars in 2019 to a peak of 14,082 million US dollars in 2023. However, in 2024, net income declined sharply to 5,895 million US dollars.

Stockholders’ Equity

Stockholders’ equity remained relatively stable between 2019 and 2023, fluctuating around the 23,000 to 25,000 million US dollars range. A significant increase occurred in 2024, with equity rising to 67,678 million US dollars.

Reported Return on Equity (ROE)

The reported ROE displayed a strong upward trend from 10.92% in 2019 to a high of 58.7% in 2023, indicating improved profitability relative to equity during this period. Nonetheless, in 2024, ROE decreased sharply to 8.71%.

Adjusted Net Income

Adjusted net income mirrored the trend seen in reported net income, initially declining slightly from 2,011 million US dollars in 2019 to 1,829 million in 2020, before increasing markedly to 13,838 million in 2023. In 2024, there was a decrease to 8,250 million US dollars, though this decline was less pronounced than the drop observed in reported net income.

Adjusted Stockholders’ Equity

Adjusted stockholders’ equity largely paralleled the pattern of reported equity, with relative stability from 2019 through 2023 ranging between approximately 22,000 and 26,000 million US dollars, followed by a pronounced jump to 72,338 million US dollars in 2024.

Adjusted Return on Equity (ROE)

The adjusted ROE demonstrated a generally positive and increasing trend from 7.58% in 2019, peaking at 59.41% in 2023, before dropping sharply to 11.4% in 2024. This pattern reflects a period of increasing efficiency in generating returns from equity which was not sustained into 2024.

Summary of Trends and Insights

The data indicates a period of strong financial performance and expanding profitability up to 2023, characterized by increasing net income, stable equity, and rising ROE metrics. The substantial rise in both reported and adjusted ROE suggests enhanced operational efficiency or favorable financial leverage during this period.

In 2024, the company experienced a marked decline in profitability ratios and net income despite a significant increase in equity. The sharp rise in equity in 2024 could be related to capital increases, asset revaluation, or other balance sheet changes, diluting profitability ratios and lowering ROE.

The divergence between the sharp increase in equity and the reduction in net income and ROE metrics in 2024 suggests a transitional phase or restructuring event that impacted financial performance, warranting further investigation to understand underlying causes.

Net Income Trends

The net income exhibited a significant upward trajectory from 2019 through 2023. Starting at $2,724 million in 2019, it increased modestly to $2,960 million in 2020 before surging to $6,736 million in 2021. This growth continued more sharply with net income reaching $11,495 million in 2022 and peaking at $14,082 million in 2023. However, there was a notable decline to $5,895 million in 2024, signaling a substantial reduction compared to the previous year.

Total Assets Evolution

Total assets demonstrated relative stability from 2019 to 2023, ranging between approximately $67 billion to $73 billion. Notably, in 2024, total assets more than doubled to $165,645 million, indicating a significant expansion in the asset base during the most recent fiscal year.

Reported Return on Assets (ROA)

The reported ROA initially showed a slight decrease from 4.04% in 2019 to 3.9% in 2020. Thereafter, it improved markedly to 8.91% in 2021, followed by a strong upward trend reaching a high of 19.33% in 2023. In 2024, the ROA sharply declined to 3.56%, reflecting the drop in net income despite the enlarged asset base.

Adjusted Net Income Analysis

Adjusted net income followed a pattern similar to net income but with generally lower absolute figures. It decreased from $2,011 million in 2019 to $1,829 million in 2020, then rose substantially to $5,701 million in 2021. The figure then nearly doubled to $11,514 million in 2022 and increased modestly to $13,838 million in 2023. In 2024, adjusted net income declined to $8,250 million, which, while lower than prior years, was relatively less severe than the drop observed in reported net income.

Adjusted Total Assets and Adjusted ROA

Adjusted total assets mirrored the trend seen in total assets, with stability between 2019 and 2023, followed by a large increase in 2024 to $165,645 million. Adjusted ROA displayed a downward trend initially from 2.95% in 2019 to 2.41% in 2020, significantly improving to 7.54% in 2021, and peaking at 18.99% in 2023. Similar to reported ROA, adjusted ROA decreased sharply in 2024 to 4.98%, indicating reduced efficiency in asset utilization relative to adjusted earnings in the latest year.

Overall Insights

The data reveal strong growth in profitability and asset efficiency through 2023, driven by rising net income and consistent asset management. The dramatic increase in total assets in 2024 suggests a potential acquisition, investment, or restructuring event. This asset growth coincides with a notable decline in profitability ratios and net income figures, implying potential integration challenges or increased costs impacting returns. Adjusted financials confirm these trends, with somewhat less severe declines, indicating some adjustments mitigate but do not fully offset the reported profitability drop.