Texas Instruments Inc. (NASDAQ:TXN)

The financial information reveals a consistent pattern of adjustment impacting total assets and stockholders’ equity between 2021 and 2025. These adjustments appear to relate to the removal of goodwill and intangible assets from the reported figures, resulting in significantly lower adjusted values. While reported net income remains unchanged by these adjustments, the impact on the balance sheet is substantial and warrants further investigation.

Total Assets

Reported total assets demonstrate an increasing trend from $24,676 million in 2021 to $35,509 million in 2024, followed by a slight decrease to $34,585 million in 2025. However, adjusted total assets, which exclude the impact of the adjustments, show a similar upward trajectory, albeit at lower levels, increasing from $20,314 million in 2021 to $31,147 million in 2024 and decreasing to $30,255 million in 2025. The difference between reported and adjusted total assets widens over the period, indicating a growing amount of goodwill or intangible assets being removed from the balance sheet.

Stockholders’ Equity

A parallel trend is observed in stockholders’ equity. Reported stockholders’ equity increases from $13,333 million in 2021 to $16,903 million in 2024, before declining to $16,273 million in 2025. Adjusted stockholders’ equity follows a similar pattern, rising from $8,971 million in 2021 to $12,541 million in 2024 and decreasing to $11,943 million in 2025. The gap between reported and adjusted stockholders’ equity also expands over time, mirroring the trend in total assets and reinforcing the conclusion that the adjustments primarily affect asset-related items impacting equity.

Net Income

Reported net income fluctuates over the five-year period, peaking at $8,749 million in 2022 and declining to $4,799 million in 2024 before recovering slightly to $5,001 million in 2025. Notably, adjusted net income remains identical to reported net income throughout the period, suggesting that the adjustments do not directly impact the income statement. However, the adjusted net income increases to $5,033 in 2025, indicating a minor adjustment in that year.

The consistent difference between reported and adjusted figures suggests a systematic removal of goodwill or intangible assets. The increasing divergence between the two sets of figures over time implies that these adjustments are becoming more significant. While net income is unaffected, the adjustments materially alter the presentation of the company’s financial position, potentially impacting key financial ratios and investor perceptions. Further analysis is needed to understand the reasons behind these adjustments and their implications for the company’s long-term financial health.

The financial performance metrics demonstrate notable shifts when goodwill is removed from the calculations. Generally, adjusted ratios present a different picture of the company’s efficiency, leverage, and profitability compared to the reported figures. A consistent trend across several ratios indicates that the presence of goodwill significantly impacts reported performance.

Profitability

Reported net profit margin experienced a decline from 42.35% in 2021 to 28.28% in 2025. The adjusted net profit margin remained relatively stable, mirroring the reported margin throughout the period. This suggests that changes in net profit margin are not directly related to the presence of goodwill. However, the adjusted Return on Equity (ROE) and Return on Assets (ROA) show a more substantial impact. Reported ROE decreased significantly from 58.27% to 30.73% over the same period, while adjusted ROE, though also declining, remained considerably higher, falling from 86.60% to 42.14%. A similar pattern is observed with ROA, where the adjusted values consistently exceed the reported values, indicating that excluding goodwill improves the perceived profitability relative to asset base and equity.

Asset Turnover

Reported total asset turnover decreased from 0.74 in 2021 to 0.44 in 2024, with a slight recovery to 0.51 in 2025. In contrast, the adjusted total asset turnover, after removing the impact of goodwill, shows a more moderate decline, starting at 0.90 in 2021 and ending at 0.58 in 2025. This indicates that goodwill inclusion artificially lowers the asset turnover ratio, suggesting a less efficient use of assets when goodwill is considered. The difference between reported and adjusted ratios widens in the middle of the period, then narrows slightly.

Financial Leverage

Reported financial leverage increased steadily from 1.85 in 2021 to 2.13 in 2025. The adjusted financial leverage also increased, but to a greater extent, moving from 2.26 in 2021 to 2.53 in 2025. This suggests that the removal of goodwill reveals a higher degree of financial leverage than is initially apparent in the reported figures. The company appears to be utilizing more debt relative to equity when goodwill is excluded from the asset base.

In summary, the removal of goodwill consistently results in higher adjusted ratios for asset turnover, ROE, ROA, and financial leverage. This implies that the presence of goodwill in the reported financial statements masks the underlying operational efficiency and financial risk profile of the company. The trends suggest that the impact of goodwill is not uniform across all ratios, with profitability ratios showing a more pronounced difference between reported and adjusted values.

The reported and adjusted net income figures demonstrate fluctuations over the five-year period. While both metrics initially show increases, a subsequent decline is evident, followed by a modest recovery in the final year. The reported and adjusted net profit margins exhibit similar trends, indicating that adjustments to net income do not materially alter the overall profitability picture.

Reported Net Profit Margin

The reported net profit margin peaked in 2022 at 43.68%. A consistent downward trend is then observed, decreasing to 30.68% in 2024. The final year shows a slight increase to 28.28%, but remains significantly below the 2022 high. This suggests increasing costs or decreasing revenue relative to sales.

Adjusted Net Profit Margin

The adjusted net profit margin mirrors the trend of the reported margin, reaching 43.68% in 2022. It then declines to 30.68% in 2024, followed by a marginal improvement to 28.46% in 2025. The consistency between reported and adjusted margins suggests that any adjustments made to net income do not significantly impact the overall profitability assessment.

Overall Trend

A clear pattern emerges: a period of strong profitability in 2021 and 2022, followed by a period of declining profitability in 2023 and 2024. The slight recovery in 2025 is insufficient to return the margins to their earlier levels. Further investigation would be required to determine the underlying drivers of these changes, such as shifts in revenue, cost of goods sold, or operating expenses.

The relatively small difference between reported and adjusted net profit margins throughout the period indicates that any non-recurring or unusual items impacting net income are not substantial enough to warrant significant attention from a profitability perspective.

An examination of the financial information reveals trends in both total asset values and associated turnover ratios over a five-year period. Reported total assets generally increased from 2021 to 2023, with a peak at US$32.348 billion, before declining slightly in 2024 and 2025. Adjusted total assets mirrored this pattern, increasing from US$20.314 billion in 2021 to US$31.147 billion in 2024, and then decreasing to US$30.255 billion in 2025.

Reported Total Asset Turnover

The reported total asset turnover ratio exhibited a consistent downward trend from 0.74 in 2021 to a low of 0.44 in 2024. A slight recovery to 0.51 was observed in 2025. This suggests a decreasing efficiency in generating revenue relative to reported total assets.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio also demonstrated a declining trend, though less pronounced than the reported ratio. It decreased from 0.90 in 2021 to 0.50 in 2024, followed by a modest increase to 0.58 in 2025. The adjusted ratio consistently remained above the reported ratio throughout the period, indicating that excluding certain asset components results in a more favorable efficiency metric.

The divergence between reported and adjusted total asset turnover suggests that the difference between the two asset figures – likely related to goodwill and intangible assets – is impacting the overall efficiency assessment. The decline in both ratios, particularly the reported ratio, warrants further investigation into the underlying drivers of asset growth and revenue generation. The slight recoveries observed in 2025 for both ratios may indicate a stabilization or potential reversal of the downward trends, but continued monitoring is necessary.

Asset Value Trends

The relatively stable adjusted asset base compared to the reported asset base suggests potential changes in the composition of assets, possibly through acquisitions or amortization of intangible assets. The decrease in both reported and adjusted assets in 2025 could be due to asset disposals, write-downs, or currency fluctuations.

An examination of the financial information reveals trends in both reported and adjusted financial leverage over a five-year period. Reported total assets generally increased from 2021 to 2024, with a slight decrease in 2025. A similar pattern is observed in reported stockholders’ equity, which experienced modest growth through 2023, plateaued in 2024, and then decreased slightly in 2025. Adjusted total assets and adjusted stockholders’ equity also demonstrate growth from 2021 to 2024, followed by a decrease in 2025, mirroring the trends in their reported counterparts. However, the magnitude of change in the adjusted figures differs, leading to variations in the calculated leverage ratios.

Reported Financial Leverage

Reported financial leverage, calculated as total assets divided by stockholders’ equity, exhibited a consistent, albeit gradual, increase from 1.85 in 2021 to 2.13 in 2025. The largest increase occurred between 2023 and 2024, moving from 1.91 to 2.10. This suggests a growing reliance on assets funded by equity over the period, though the increase is relatively contained.

Adjusted Financial Leverage

Adjusted financial leverage, which considers adjustments to both total assets and stockholders’ equity, presents a different picture. It began at 2.26 in 2021 and remained relatively stable through 2023 at approximately 2.23-2.24. A more pronounced increase is then observed between 2023 and 2025, rising to 2.53. This indicates that, when considering the adjustments made to assets and equity, the company’s financial leverage is increasing at a faster rate than indicated by the reported figures. The adjustments appear to be amplifying the leverage effect.

Comparison of Reported and Adjusted Leverage

Throughout the observed period, adjusted financial leverage consistently exceeded reported financial leverage. The difference between the two ratios widened over time, particularly from 2023 onwards. This divergence suggests that the adjustments made to total assets and stockholders’ equity have a material impact on the assessment of the company’s financial risk. The increasing gap implies that the reported leverage ratio may underestimate the true financial leverage position of the company.

The decrease in both reported and adjusted total assets and stockholders’ equity in 2025 warrants further investigation to understand the underlying drivers. The continued increase in adjusted financial leverage, despite the asset and equity decline, suggests that the adjustments are becoming more significant in determining the overall leverage profile.

The period under review demonstrates fluctuating financial performance as indicated by reported and adjusted return on equity (ROE) calculations. Reported net income peaked in 2022 at US$8,749 million before declining to US$4,799 million in 2024, with a slight recovery to US$5,001 million in 2025. Adjusted net income follows a similar pattern, reaching US$5,033 million in 2025. Stockholders’ equity, both reported and adjusted, generally increased from 2021 to 2023, then plateaued and experienced a slight decrease in 2025.

Reported ROE

Reported ROE exhibited a peak of 60.02% in 2022, followed by a substantial decline to 28.39% in 2024. A modest increase to 30.73% was observed in 2025. This trend largely mirrors the fluctuations in reported net income, suggesting a strong correlation between profitability and the reported ROE.

Adjusted ROE

Adjusted ROE began at a high of 86.60% in 2021, decreasing to 38.27% in 2024 before recovering to 42.14% in 2025. The adjusted ROE consistently exceeds the reported ROE throughout the period, indicating that adjustments to stockholders’ equity significantly impact the calculated return. The decline from 2021 to 2024 aligns with the decrease in adjusted net income, while the 2025 increase suggests a stabilizing effect.

Equity Trends

Reported stockholders’ equity increased from US$13,333 million in 2021 to US$16,897 million in 2023, then remained relatively stable at US$16,903 million in 2024, and decreased slightly to US$16,273 million in 2025. Adjusted stockholders’ equity followed a similar trajectory, increasing from US$8,971 million in 2021 to US$12,535 million in 2023, with a slight decrease to US$11,943 million in 2025. The difference between reported and adjusted equity suggests the presence of significant intangible assets or goodwill impacting the reported equity value.

The divergence between reported and adjusted ROE, and the corresponding equity values, highlights the importance of considering adjustments when evaluating the company’s financial performance. The fluctuations in both net income and ROE suggest potential sensitivity to external factors or internal operational changes. The recovery observed in 2025 for both net income and ROE may indicate a positive shift in these factors.

The period between 2021 and 2025 demonstrates fluctuating financial performance as indicated by reported and adjusted return on assets. Reported net income initially increased from 2021 to 2022, then declined significantly in 2023 and 2024 before a modest recovery in 2025. Adjusted net income follows a similar pattern. Total assets, both reported and adjusted, generally increased until 2024, with a slight decrease observed in 2025.

Reported Return on Assets (ROA)

Reported ROA peaked at 32.16% in 2022, representing an increase from 31.48% in 2021. A substantial decrease was then observed in 2023, falling to 20.12%, and continued downward to 13.51% in 2024. A slight recovery to 14.46% occurred in 2025, but remained significantly below the 2021 and 2022 levels. This suggests diminishing profitability relative to total assets.

Adjusted Return on Assets (ROA)

Adjusted ROA exhibited a similar trend to the reported ROA, starting at 38.24% in 2021 and 38.30% in 2022. It then decreased to 23.26% in 2023 and 15.41% in 2024, followed by a modest increase to 16.64% in 2025. The adjusted ROA consistently exceeded the reported ROA throughout the period, indicating that adjustments to total assets positively impacted profitability metrics. The magnitude of the decline from 2022 to 2024 was considerable for both reported and adjusted ROA.

Asset Trends

Reported total assets increased from US$24,676 million in 2021 to US$35,509 million in 2024, before decreasing slightly to US$34,585 million in 2025. Adjusted total assets followed a similar pattern, rising from US$20,314 million in 2021 to US$31,147 million in 2024, and then decreasing to US$30,255 million in 2025. The difference between reported and adjusted total assets remained relatively consistent throughout the period, suggesting a systematic adjustment being applied.

Net Income Trends

Both reported and adjusted net income increased from 2021 to 2022, then experienced a significant decline in 2023 and 2024. While adjusted net income showed a slight increase in 2025, it did not fully recover to the levels seen in 2021 and 2022. The decline in net income appears to be a primary driver of the observed decrease in ROA.

The consistent difference between reported and adjusted ROA suggests that the adjustments made to total assets have a material impact on the assessment of profitability. The declines in both reported and adjusted ROA from 2022 to 2024 warrant further investigation to understand the underlying causes and potential implications for future performance.