Stock Analysis on Net
Stock Analysis on Net

Advanced Micro Devices Inc. (NASDAQ:AMD)

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Economic Value Added (EVA)

Microsoft Excel LibreOffice Calc

Economic Profit

Advanced Micro Devices Inc., economic profit calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 26, 2020 Dec 28, 2019 Dec 29, 2018 Dec 30, 2017 Dec 31, 2016
Net operating profit after taxes (NOPAT)1
Cost of capital2
Invested capital3
 
Economic profit4

Based on: 10-K (filing date: 2021-01-29), 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-21).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2020 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= × =

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. Advanced Micro Devices Inc.’s economic profit decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Net Operating Profit after Taxes (NOPAT)

Advanced Micro Devices Inc., NOPAT calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 26, 2020 Dec 28, 2019 Dec 29, 2018 Dec 30, 2017 Dec 31, 2016
Net income (loss)
Deferred income tax expense (benefit)1
Increase (decrease) in unearned revenue2
Increase (decrease) in liability for product warranty3
Increase (decrease) in equity equivalents4
Interest expense
Interest expense, operating lease liability5
Adjusted interest expense
Tax benefit of interest expense6
Adjusted interest expense, after taxes7
Interest income
Investment income, before taxes
Tax expense (benefit) of investment income8
Investment income, after taxes9
Net operating profit after taxes (NOPAT)

Based on: 10-K (filing date: 2021-01-29), 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-21).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in unearned revenue.

3 Addition of increase (decrease) in liability for product warranty.

4 Addition of increase (decrease) in equity equivalents to net income (loss).

5 2020 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

6 2020 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =

7 Addition of after taxes interest expense to net income (loss).

8 2020 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =

9 Elimination of after taxes investment income.

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. Advanced Micro Devices Inc.’s NOPAT increased from 2018 to 2019 and from 2019 to 2020.

Cash Operating Taxes

Advanced Micro Devices Inc., cash operating taxes calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 26, 2020 Dec 28, 2019 Dec 29, 2018 Dec 30, 2017 Dec 31, 2016
Income tax provision (benefit)
Less: Deferred income tax expense (benefit)
Add: Tax savings from interest expense
Less: Tax imposed on investment income
Cash operating taxes

Based on: 10-K (filing date: 2021-01-29), 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-21).

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. Advanced Micro Devices Inc.’s cash operating taxes increased from 2018 to 2019 but then slightly decreased from 2019 to 2020 not reaching 2018 level.

Invested Capital

Advanced Micro Devices Inc., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 26, 2020 Dec 28, 2019 Dec 29, 2018 Dec 30, 2017 Dec 31, 2016
Short-term debt, net
Long-term debt, net, less current portion
Operating lease liability1
Total reported debt & leases
Stockholders’ equity
Net deferred tax (assets) liabilities2
Unearned revenue3
Liability for product warranty4
Equity equivalents5
Accumulated other comprehensive (income) loss, net of tax6
Adjusted stockholders’ equity
Construction in progress7
Short-term investments8
Invested capital

Based on: 10-K (filing date: 2021-01-29), 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-21).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of unearned revenue.

4 Addition of liability for product warranty.

5 Addition of equity equivalents to stockholders’ equity.

6 Removal of accumulated other comprehensive income.

7 Subtraction of construction in progress.

8 Subtraction of short-term investments.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Advanced Micro Devices Inc.’s invested capital increased from 2018 to 2019 and from 2019 to 2020.

Cost of Capital

Advanced Micro Devices Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (filing date: 2021-01-29).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (filing date: 2020-02-04).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (filing date: 2019-02-08).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (filing date: 2018-02-27).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (filing date: 2017-02-21).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

Advanced Micro Devices Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 26, 2020 Dec 28, 2019 Dec 29, 2018 Dec 30, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Economic profit1
Invested capital2
Performance Ratio
Economic spread ratio3
Benchmarks
Economic Spread Ratio, Competitors4
Applied Materials Inc.
Broadcom Inc.
Intel Corp.
Lam Research Corp.
Micron Technology Inc.
NVIDIA Corp.
Qualcomm Inc.
Texas Instruments Inc.

Based on: 10-K (filing date: 2021-01-29), 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-21).

1 Economic profit. See details »

2 Invested capital. See details »

3 2020 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. Advanced Micro Devices Inc.’s economic spread ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level.

Economic Profit Margin

Advanced Micro Devices Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 26, 2020 Dec 28, 2019 Dec 29, 2018 Dec 30, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Economic profit1
 
Net revenue
Add: Increase (decrease) in unearned revenue
Adjusted net revenue
Performance Ratio
Economic profit margin2
Benchmarks
Economic Profit Margin, Competitors3
Applied Materials Inc.
Broadcom Inc.
Intel Corp.
Lam Research Corp.
Micron Technology Inc.
NVIDIA Corp.
Qualcomm Inc.
Texas Instruments Inc.

Based on: 10-K (filing date: 2021-01-29), 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-21).

1 Economic profit. See details »

2 2020 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net revenue
= 100 × ÷ =

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company’s profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. Advanced Micro Devices Inc.’s economic profit margin deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level.