Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Analog Devices Inc. (NASDAQ:ADI)

Analysis of Goodwill and Intangible Assets

Advanced level

Goodwill and Intangible Asset Disclosure

Analog Devices Inc., balance sheet: goodwill and intangible assets

US$ in thousands

Microsoft Excel LibreOffice Calc
Oct 31, 2020 Nov 2, 2019 Nov 3, 2018 Oct 28, 2017 Oct 29, 2016 Oct 31, 2015
Goodwill 12,278,425  12,256,880  12,252,604  12,217,455  1,679,116  1,636,526 
Customer relationships 4,700,454  4,696,562  4,697,716  4,683,461  649,159  624,900 
Technology-based 1,136,742  1,145,283  1,114,080  1,097,025  22,231  16,200 
Trade-name 72,200  73,417  74,031  72,800  600  — 
Backlog —  —  —  200  200  25,500 
IPR&D —  —  20,768  24,334  46,175  37,264 
Intangible assets, gross carrying amount 5,909,396  5,915,262  5,906,595  5,877,820  718,365  703,864 
Accumulated amortization (2,259,116) (1,698,038) (1,128,403) (558,395) (168,997) (120,347)
Intangible assets 3,650,280  4,217,224  4,778,192  5,319,425  549,368  583,517 
Goodwill and intangible assets 15,928,705  16,474,104  17,030,796  17,536,880  2,228,484  2,220,043 

Based on: 10-K (filing date: 2020-11-24), 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-27), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-22), 10-K (filing date: 2015-11-24).

Item Description The company
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Analog Devices Inc.’s goodwill increased from 2018 to 2019 and from 2019 to 2020.
Intangible assets Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Analog Devices Inc.’s intangible assets decreased from 2018 to 2019 and from 2019 to 2020.
Goodwill and intangible assets Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Analog Devices Inc.’s goodwill and intangible assets decreased from 2018 to 2019 and from 2019 to 2020.

Adjustments to Financial Statements: Removal of Goodwill

Analog Devices Inc., adjustments to financial statements

US$ in thousands

Microsoft Excel LibreOffice Calc
Oct 31, 2020 Nov 2, 2019 Nov 3, 2018 Oct 28, 2017 Oct 29, 2016 Oct 31, 2015
Adjustment to Total Assets
Total assets (as reported) 21,468,603  21,392,641  20,449,779  21,141,294  7,970,278  7,062,178 
Less: Goodwill 12,278,425  12,256,880  12,252,604  12,217,455  1,679,116  1,636,526 
Total assets (adjusted) 9,190,178  9,135,761  8,197,175  8,923,839  6,291,162  5,425,652 
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported) 11,997,945  11,709,188  10,988,540  10,161,540  5,165,618  5,072,959 
Less: Goodwill 12,278,425  12,256,880  12,252,604  12,217,455  1,679,116  1,636,526 
Shareholders’ equity (adjusted) (280,480) (547,692) (1,264,064) (2,055,915) 3,486,502  3,436,433 

Based on: 10-K (filing date: 2020-11-24), 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-27), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-22), 10-K (filing date: 2015-11-24).

Analog Devices Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Analog Devices Inc., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Oct 31, 2020 Nov 2, 2019 Nov 3, 2018 Oct 28, 2017 Oct 29, 2016 Oct 31, 2015
Total Asset Turnover
Reported total asset turnover 0.26 0.28 0.30 0.24 0.43 0.49
Adjusted total asset turnover 0.61 0.66 0.76 0.57 0.54 0.63
Financial Leverage
Reported financial leverage 1.79 1.83 1.86 2.08 1.54 1.39
Adjusted financial leverage — — — — 1.80 1.58
Return on Equity (ROE)
Reported ROE 10.17% 11.64% 13.61% 7.16% 16.68% 13.74%
Adjusted ROE — — — — 24.71% 20.28%
Return on Assets (ROA)
Reported ROA 5.69% 6.37% 7.31% 3.44% 10.81% 9.87%
Adjusted ROA 13.28% 14.92% 18.24% 8.15% 13.70% 12.84%

Based on: 10-K (filing date: 2020-11-24), 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-27), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-22), 10-K (filing date: 2015-11-24).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Analog Devices Inc.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Analog Devices Inc.’s adjusted ROA deteriorated from 2018 to 2019 and from 2019 to 2020.

Analog Devices Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Oct 31, 2020 Nov 2, 2019 Nov 3, 2018 Oct 28, 2017 Oct 29, 2016 Oct 31, 2015
As Reported
Selected Financial Data (US$ in thousands)
Revenue 5,603,056  5,991,065  6,200,942  5,107,503  3,421,409  3,435,092 
Total assets 21,468,603  21,392,641  20,449,779  21,141,294  7,970,278  7,062,178 
Activity Ratio
Total asset turnover1 0.26 0.28 0.30 0.24 0.43 0.49
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Revenue 5,603,056  5,991,065  6,200,942  5,107,503  3,421,409  3,435,092 
Adjusted total assets 9,190,178  9,135,761  8,197,175  8,923,839  6,291,162  5,425,652 
Activity Ratio
Adjusted total asset turnover2 0.61 0.66 0.76 0.57 0.54 0.63

Based on: 10-K (filing date: 2020-11-24), 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-27), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-22), 10-K (filing date: 2015-11-24).

2020 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= 5,603,056 ÷ 21,468,603 = 0.26

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 5,603,056 ÷ 9,190,178 = 0.61

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Analog Devices Inc.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Oct 31, 2020 Nov 2, 2019 Nov 3, 2018 Oct 28, 2017 Oct 29, 2016 Oct 31, 2015
As Reported
Selected Financial Data (US$ in thousands)
Total assets 21,468,603  21,392,641  20,449,779  21,141,294  7,970,278  7,062,178 
Shareholders’ equity 11,997,945  11,709,188  10,988,540  10,161,540  5,165,618  5,072,959 
Solvency Ratio
Financial leverage1 1.79 1.83 1.86 2.08 1.54 1.39
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets 9,190,178  9,135,761  8,197,175  8,923,839  6,291,162  5,425,652 
Adjusted shareholders’ equity (280,480) (547,692) (1,264,064) (2,055,915) 3,486,502  3,436,433 
Solvency Ratio
Adjusted financial leverage2 — — — — 1.80 1.58

Based on: 10-K (filing date: 2020-11-24), 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-27), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-22), 10-K (filing date: 2015-11-24).

2020 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity
= 21,468,603 ÷ 11,997,945 = 1.79

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 9,190,178 ÷ -280,480 = —

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Oct 31, 2020 Nov 2, 2019 Nov 3, 2018 Oct 28, 2017 Oct 29, 2016 Oct 31, 2015
As Reported
Selected Financial Data (US$ in thousands)
Net income 1,220,761  1,363,011  1,495,432  727,259  861,664  696,878 
Shareholders’ equity 11,997,945  11,709,188  10,988,540  10,161,540  5,165,618  5,072,959 
Profitability Ratio
ROE1 10.17% 11.64% 13.61% 7.16% 16.68% 13.74%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income 1,220,761  1,363,011  1,495,432  727,259  861,664  696,878 
Adjusted shareholders’ equity (280,480) (547,692) (1,264,064) (2,055,915) 3,486,502  3,436,433 
Profitability Ratio
Adjusted ROE2 — — — — 24.71% 20.28%

Based on: 10-K (filing date: 2020-11-24), 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-27), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-22), 10-K (filing date: 2015-11-24).

2020 Calculations

1 ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × 1,220,761 ÷ 11,997,945 = 10.17%

2 Adjusted ROE = 100 × Net income ÷ Adjusted shareholders’ equity
= 100 × 1,220,761 ÷ -280,480 = —

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Oct 31, 2020 Nov 2, 2019 Nov 3, 2018 Oct 28, 2017 Oct 29, 2016 Oct 31, 2015
As Reported
Selected Financial Data (US$ in thousands)
Net income 1,220,761  1,363,011  1,495,432  727,259  861,664  696,878 
Total assets 21,468,603  21,392,641  20,449,779  21,141,294  7,970,278  7,062,178 
Profitability Ratio
ROA1 5.69% 6.37% 7.31% 3.44% 10.81% 9.87%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income 1,220,761  1,363,011  1,495,432  727,259  861,664  696,878 
Adjusted total assets 9,190,178  9,135,761  8,197,175  8,923,839  6,291,162  5,425,652 
Profitability Ratio
Adjusted ROA2 13.28% 14.92% 18.24% 8.15% 13.70% 12.84%

Based on: 10-K (filing date: 2020-11-24), 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-27), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-22), 10-K (filing date: 2015-11-24).

2020 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 1,220,761 ÷ 21,468,603 = 5.69%

2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 1,220,761 ÷ 9,190,178 = 13.28%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Analog Devices Inc.’s adjusted ROA deteriorated from 2018 to 2019 and from 2019 to 2020.