NVIDIA Corp. (NASDAQ:NVDA)

The financial ratios presented demonstrate notable shifts over the observed period. Generally, asset utilization and profitability metrics exhibit increasing trends, while leverage ratios indicate a decreasing reliance on debt financing. The adjusted ratios consistently present slightly different values than the reported ratios, suggesting the impact of specific accounting adjustments on the financial picture.

Asset Turnover

Both the reported and adjusted total asset turnover ratios show a consistent upward trend from 2021 through 2025. The adjusted ratio begins at 0.60 and peaks at 1.30, indicating improving efficiency in asset utilization. A slight decrease is observed in 2026, with the adjusted ratio falling to 1.12, though it remains significantly higher than the initial value. The adjusted ratio consistently exceeds the reported ratio, suggesting that adjustments increase the calculated turnover.

Liquidity

The reported and adjusted current ratios fluctuate over the period. Both ratios initially increase from 2021 to 2022, then decline in 2023 before rising again in 2024 and 2025. A decrease is observed in 2026, with both ratios falling slightly. The adjusted current ratio consistently shows a higher value than the reported ratio, indicating that adjustments improve the liquidity position. The ratios remain above 3.91 throughout the period, suggesting a strong liquidity position.

Leverage

Both the reported and adjusted debt-to-equity and debt-to-capital ratios demonstrate a clear downward trend from 2021 to 2026. The adjusted ratios consistently show slightly higher values than the reported ratios, indicating that adjustments increase the calculated leverage. By 2026, both adjusted ratios reach relatively low levels of 0.08 and 0.07 respectively, suggesting a substantial reduction in debt financing. Similarly, reported and adjusted financial leverage ratios decrease over the period, indicating a reduced reliance on financial leverage.

Profitability

The reported net profit margin experiences significant volatility. It increases substantially from 2021 to 2022, declines in 2023, and then rises dramatically in 2024 and 2025, remaining high in 2026. The adjusted net profit margin follows a similar pattern, though the magnitude of the changes differs, particularly in 2023 where the adjusted margin is considerably lower. Both reported and adjusted return on equity (ROE) and return on assets (ROA) show substantial increases from 2021 to 2025, followed by a slight decrease in 2026. The adjusted ROE and ROA consistently exceed the reported values, suggesting that adjustments positively impact profitability metrics.

In summary, the observed trends suggest improving asset utilization, maintained liquidity, decreasing leverage, and fluctuating but generally increasing profitability. The adjustments applied consistently alter the reported values, often resulting in higher asset turnover and profitability metrics, and higher leverage ratios. The significant increases in profitability metrics from 2023 to 2025 warrant further investigation to understand the underlying drivers.

The adjusted total asset turnover ratio demonstrates a generally increasing trend over the observed period. Initial values indicate a ratio of 0.60 in 2021, rising to 1.30 in 2025 before decreasing slightly to 1.12 in 2026. This suggests improving efficiency in asset utilization for revenue generation, followed by a modest pullback in the most recent year.

Overall Trend

From 2021 through 2025, the adjusted total asset turnover ratio exhibits consistent growth. This indicates that the company is becoming increasingly effective at generating sales from its asset base. The increase from 0.60 in 2021 to 1.30 in 2025 represents a more than doubling of the ratio, signifying a substantial improvement in operational efficiency. The slight decrease to 1.12 in 2026 warrants further investigation, but does not negate the overall positive trend.

Year-over-Year Changes

The largest year-over-year increase occurred between 2024 and 2025, with the ratio climbing from 1.03 to 1.30. This substantial jump suggests a significant improvement in how effectively assets were used to generate revenue during that period. Smaller, but consistent, increases were observed between 2021 and 2024. The decrease from 1.30 in 2025 to 1.12 in 2026 is the only observed decline in the period, representing a decrease of approximately 14%.

Comparison to Reported Ratio

The adjusted total asset turnover ratio consistently exceeds the reported total asset turnover ratio across all observed years. The difference between the two ratios varies, but generally remains within a range of 0.02 to 0.08. This suggests that adjustments to total assets and/or revenue are resulting in a more favorable efficiency metric. The adjustments appear to be consistently increasing the calculated turnover ratio.

In summary, the adjusted total asset turnover ratio indicates improving asset utilization efficiency over the majority of the analyzed period. While a slight decrease is observed in the final year, the overall trend remains positive, suggesting effective management of assets in relation to revenue generation.

The adjusted current ratio exhibits fluctuations over the observed period, generally indicating a healthy short-term liquidity position, though with some variability. An initial upward trend is followed by a period of decline and subsequent stabilization. The adjusted current ratio consistently remains above 3.75, suggesting the entity possesses more than sufficient current assets to cover its current liabilities throughout the analyzed timeframe.

Overall Trend

From January 31, 2021, to January 26, 2025, the adjusted current ratio demonstrates an increasing trend, rising from 4.44 to 5.03. A slight decrease is then observed in January 28, 2026, with the ratio settling at 4.49. This suggests a period of strengthening liquidity followed by a minor contraction.

Peak and Trough Values

The highest adjusted current ratio is recorded on January 26, 2025, at 5.03. The lowest value within the period is observed on January 31, 2021, at 4.44. The difference between these values indicates a maximum increase in liquidity of approximately 13.4% over the period.

Year-over-Year Changes

A significant increase in the adjusted current ratio is noted between January 30, 2022, and January 26, 2025, moving from 7.23 to 5.03. This suggests substantial growth in current assets relative to current liabilities during those years. The decrease from 2025 to 2026, while present, is less pronounced.

Comparison to Reported Current Ratio

The adjusted current ratio consistently exceeds the reported current ratio across all observed dates. This indicates that the adjustments made to current assets and liabilities result in a more favorable liquidity picture. The difference between the two ratios varies, but generally remains within a range of 0.1 to 0.6, suggesting the adjustments have a moderate but consistent impact.

The observed fluctuations in the adjusted current ratio likely reflect changes in working capital management, investment in current assets, and the timing of current liability payments. While the ratio remains comfortably above the benchmark of 1.0, continued monitoring is recommended to understand the drivers behind the observed changes and ensure sustained liquidity.

The adjusted debt to equity ratio exhibits a dynamic pattern over the observed period. Initially, the ratio increased before declining significantly. Total debt remained relatively stable between 2021 and 2023, while shareholders’ equity fluctuated considerably, driving changes in both the reported and adjusted ratios. The adjusted figures demonstrate a slightly different trajectory than the reported figures, suggesting the impact of adjustments to debt and equity calculations.

Adjusted Debt to Equity Ratio - Overall Trend

The adjusted debt to equity ratio began at 0.46 in 2021, decreased to 0.45 in 2022, then increased to 0.61 in 2023. A substantial decrease followed, with the ratio falling to 0.28 in 2024, 0.14 in 2025, and further to 0.08 in 2026. This indicates a decreasing reliance on debt financing relative to equity over the latter part of the period.

Debt and Equity Components

Adjusted total debt increased from US$7,718 million in 2021 to US$12,031 million in 2023, before decreasing to US$11,056 million in 2024 and stabilizing around US$10-11 billion through 2026. Adjusted shareholders’ equity demonstrated a more pronounced growth trend, increasing from US$16,805 million in 2021 to US$151,192 million in 2026. This substantial increase in equity is the primary driver of the declining adjusted debt to equity ratio.

Comparison to Reported Debt to Equity

While both the reported and adjusted debt to equity ratios generally move in the same direction, the adjusted ratio consistently presents a slightly higher value than the reported ratio. This suggests that the adjustments made to total debt and shareholders’ equity result in a modestly more conservative leverage picture. The magnitude of the difference between the reported and adjusted ratios remains relatively consistent throughout the period.

The significant decline in the adjusted debt to equity ratio from 2023 to 2026 suggests a strengthening financial position, characterized by a greater proportion of equity financing. The consistent growth in adjusted shareholders’ equity, coupled with relatively stable adjusted total debt, supports this conclusion.

The adjusted debt to capital ratio exhibits a fluctuating pattern over the observed period. Initially, the ratio demonstrates relative stability before declining significantly in later years. Total debt shows an initial increase followed by a gradual decrease, while total capital experiences substantial growth throughout the period, influencing the observed ratio trends.

Adjusted Debt to Capital Ratio - Overall Trend

The adjusted debt to capital ratio begins at 0.31 in 2021 and remains at the same level in 2022. It then increases to 0.38 in 2023, before decreasing to 0.22 in 2024. This downward trend continues, with the ratio falling to 0.12 in 2025 and further to 0.07 in 2026. This indicates a decreasing reliance on debt financing relative to the company’s capital base.

Total Debt

Total debt increases from US$6,963 million in 2021 to US$10,946 million in 2022, then remains relatively stable at US$10,953 million in 2023. A decrease is then observed, falling to US$9,709 million in 2024, US$8,463 million in 2025, and remaining at US$8,468 million in 2026. This suggests a period of increased borrowing followed by a deliberate reduction in debt levels.

Total Capital

Total capital demonstrates consistent growth throughout the period. It increases from US$23,856 million in 2021 to US$37,558 million in 2022, then decreases to US$33,054 million in 2023. Further growth is observed, reaching US$52,687 million in 2024, US$87,790 million in 2025, and US$165,761 million in 2026. This substantial increase in capital likely contributes to the declining adjusted debt to capital ratio.

Relationship between Debt and Capital

The combination of decreasing debt and increasing capital results in a significant improvement in the adjusted debt to capital ratio. While debt levels fluctuate, the consistent expansion of the capital base exerts a dominant influence, leading to a progressively more conservative capital structure as indicated by the ratio’s decline.

The adjusted figures present a different picture than the reported debt to capital ratio, suggesting adjustments are being made to the reported debt and/or capital figures. The adjusted ratio consistently shows a higher value than the reported ratio until 2024, when the difference narrows. This indicates the adjustments are having a material impact on the perceived financial leverage of the company.

An examination of the financial information reveals trends in adjusted financial leverage over a five-year period. Total assets and shareholders’ equity both demonstrate consistent growth throughout the observed timeframe. However, the adjusted financial leverage ratio exhibits a more nuanced pattern, initially increasing before stabilizing and then declining.

Adjusted Financial Leverage – Overall Trend

The adjusted financial leverage ratio begins at 1.67 in 2021 and increases to a peak of 1.93 in 2023. Following this peak, the ratio decreases to 1.39 in 2025 and further to 1.28 in 2026. This suggests an initial period of increased reliance on financial leverage, followed by a strengthening of the equity base relative to adjusted assets.

Adjusted Financial Leverage – Comparison to Reported Leverage

The adjusted financial leverage ratio generally mirrors the trend of the reported financial leverage ratio. Both ratios show an increase between 2021 and 2023, followed by a decline in subsequent years. The adjusted leverage ratio consistently remains slightly below the reported leverage ratio throughout the period, indicating that the adjustments made to total assets and shareholders’ equity result in a modestly lower leverage figure.

Asset and Equity Growth

Adjusted total assets increased from US$27,989 million in 2021 to US$193,549 million in 2026, representing substantial growth. Similarly, adjusted shareholders’ equity grew from US$16,805 million to US$151,192 million over the same period. The faster growth of equity relative to adjusted assets in the later years likely contributes to the observed decline in the adjusted financial leverage ratio.

The observed decrease in adjusted financial leverage in the later years of the period suggests improving financial stability, as the company is financing a greater proportion of its assets with equity rather than debt. The consistent growth in both assets and equity indicates a healthy expansion of the business.

The adjusted net profit margin exhibited fluctuating performance over the observed period. Initial values were relatively stable, followed by a period of significant volatility and then a convergence towards a consistent level. A detailed examination of the trends reveals key insights into the company’s profitability.

Overall Trend

From January 31, 2021, to January 28, 2024, the adjusted net profit margin demonstrated an initial decline, a substantial increase, and then a leveling off. The margin began at 25.57% in 2021, decreased to a low of 8.42% in 2023, and then rose sharply to 45.93% in 2024. Subsequent years, 2025 and 2026, show a more moderate increase, reaching 53.34% and 55.87% respectively.

Initial Period (2021-2022)

The adjusted net profit margin experienced a decrease from 25.57% in 2021 to 34.83% in 2022. This suggests a potential increase in costs or a change in revenue mix during this period, despite revenue growth. The decline, while present, remained within a reasonable range.

Significant Fluctuation (2022-2023)

A substantial decrease in the adjusted net profit margin occurred between 2022 and 2023, falling from 34.83% to 8.42%. This represents a significant drop in profitability and warrants further investigation into the underlying causes. The decrease occurred despite a slight increase in adjusted revenue.

Recovery and Stabilization (2023-2026)

Following the low in 2023, the adjusted net profit margin rebounded dramatically to 45.93% in 2024. This recovery continued, albeit at a slower pace, reaching 53.34% in 2025 and 55.87% in 2026. This indicates successful implementation of cost control measures, improved pricing strategies, or a shift towards higher-margin products. The convergence towards the 55-56% range in the latter years suggests a potential stabilization of profitability.

Comparison to Reported Margin

The adjusted net profit margin consistently tracks below the reported net profit margin across all observed years. The difference between the two margins suggests the presence of non-recurring items or accounting adjustments impacting the reported figures. The magnitude of the difference varies, but the adjusted margin provides a potentially more conservative and comparable view of underlying profitability.

In conclusion, the adjusted net profit margin demonstrates a complex trajectory characterized by initial stability, a significant downturn, and a subsequent recovery culminating in a period of stabilization. The fluctuations highlight the importance of ongoing monitoring and analysis of the factors influencing profitability.

The adjusted return on equity (ROE) exhibits a dynamic pattern over the observed period. Initially, the adjusted ROE demonstrates a period of relative stability followed by significant fluctuation. A review of the underlying components, adjusted net income and adjusted shareholders’ equity, reveals insights into these movements.

Overall Trend

From January 31, 2021, to January 26, 2025, the adjusted ROE generally increased. However, a slight decrease is observed between January 26, 2025, and January 25, 2026. The adjusted ROE begins at 25.75% and peaks at 96.58% before settling at 80.08%.

Initial Period (2021-2022)

Between January 31, 2021, and January 30, 2022, the adjusted ROE increased from 25.75% to 35.86%. This increase correlates with growth in both adjusted net income and adjusted shareholders’ equity, though the increase in net income is more pronounced.

Mid-Period Decline (2022-2023)

A substantial decline in adjusted ROE is evident between January 30, 2022, and January 29, 2023, falling from 35.86% to 11.62%. This decrease is primarily driven by a significant reduction in adjusted net income, while adjusted shareholders’ equity also experiences a decrease, albeit less dramatic.

Subsequent Growth (2023-2025)

From January 29, 2023, to January 26, 2025, the adjusted ROE experiences a considerable recovery and expansion, rising from 11.62% to 96.58%. This growth is fueled by substantial increases in both adjusted net income and adjusted shareholders’ equity. The growth in adjusted net income is particularly noteworthy.

Latest Period (2025-2026)

The most recent period, from January 26, 2025, to January 25, 2026, shows a moderate decrease in adjusted ROE, from 96.58% to 80.08%. While adjusted net income increases, the growth in adjusted shareholders’ equity is proportionally larger, resulting in the observed decline in ROE.

In summary, the adjusted ROE demonstrates a pattern of initial stability, a mid-period decline, substantial recovery, and a recent slight decrease. These fluctuations are closely linked to the concurrent changes in adjusted net income and adjusted shareholders’ equity, with net income appearing to have a more significant influence on the ROE movements.

The adjusted return on assets (ROA) exhibited a fluctuating pattern over the observed period. Initial values were strong, followed by a notable decline, and then a substantial recovery and subsequent stabilization. A detailed examination of the components and the resulting ratio reveals key trends in the company’s performance.

Overall Trend

From January 31, 2021, to January 26, 2025, the adjusted ROA demonstrated an increasing trend, peaking at 69.43%. A slight decrease was then observed through January 25, 2026, settling at 62.55%. This suggests a period of significant profitability improvement followed by a leveling off.

Initial Period (2021-2022)

The adjusted ROA began at 15.46% in 2021 and increased to 21.86% in 2022. This growth coincided with an increase in adjusted net income from US$4,327 million to US$9,391 million, while adjusted total assets also rose, but at a slower pace, from US$27,989 million to US$42,969 million. The increase in net income outpaced the growth in assets, driving the ROA higher.

Decline (2023)

A significant decline in adjusted ROA was observed in 2023, falling to 6.03%. This was primarily driven by a substantial decrease in adjusted net income to US$2,278 million, while adjusted total assets also decreased to US$37,790 million. The combination of lower income and lower asset base resulted in a considerably reduced ROA.

Recovery and Stabilization (2024-2026)

From 2024 onwards, the adjusted ROA experienced a strong recovery. It rose to 47.49% in 2024, then to 69.43% in 2025, and remained relatively stable at 62.55% in 2026. This recovery was fueled by substantial increases in adjusted net income, reaching US$28,330 million, US$69,864 million, and US$121,069 million respectively. Adjusted total assets also increased significantly, but the growth in net income consistently exceeded the growth in assets, leading to the improved ROA. The stabilization in 2026 suggests a mature phase of profitability.

The fluctuations in adjusted ROA appear closely linked to changes in adjusted net income. While asset growth contributed to the overall trend, the primary driver of the observed changes in ROA was the company’s profitability. The substantial growth in recent years indicates a significant improvement in the efficiency with which the company utilizes its assets to generate earnings.