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

Analog Devices Inc. (NASDAQ:ADI)

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Economic Value Added (EVA)

Advanced level

EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit

Analog Devices Inc., economic profit calculation

US$ in thousands

Microsoft Excel LibreOffice Calc
12 months ended: Oct 31, 2020 Nov 2, 2019 Nov 3, 2018 Oct 28, 2017 Oct 29, 2016 Oct 31, 2015
Net operating profit after taxes (NOPAT)1
Cost of capital2
Invested capital3
 
Economic profit4

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).

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. Analog Devices Inc.’s economic profit increased from 2018 to 2019 but then slightly decreased from 2019 to 2020 not reaching 2018 level.

Net Operating Profit after Taxes (NOPAT)

Analog Devices Inc., NOPAT calculation

US$ in thousands

Microsoft Excel LibreOffice Calc
12 months ended: Oct 31, 2020 Nov 2, 2019 Nov 3, 2018 Oct 28, 2017 Oct 29, 2016 Oct 31, 2015
Net income
Deferred income tax expense (benefit)1
Increase (decrease) in accounts receivable reserves and allowances2
Increase (decrease) in accrued special charges3
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: 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).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in accounts receivable reserves and allowances.

3 Addition of increase (decrease) in accrued special charges.

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

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.

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. Analog Devices Inc.’s NOPAT increased from 2018 to 2019 but then slightly decreased from 2019 to 2020.

Cash Operating Taxes

Analog Devices Inc., cash operating taxes calculation

US$ in thousands

Microsoft Excel LibreOffice Calc
12 months ended: Oct 31, 2020 Nov 2, 2019 Nov 3, 2018 Oct 28, 2017 Oct 29, 2016 Oct 31, 2015
Provision for income tax
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: 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
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. Analog Devices Inc.’s cash operating taxes decreased from 2018 to 2019 and from 2019 to 2020.

Invested Capital

Analog Devices Inc., invested capital calculation (financing approach)

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
Debt, current
Long-term debt, excluding current
Operating lease liability1
Total reported debt & leases
Shareholders’ equity
Net deferred tax (assets) liabilities2
Accounts receivable reserves and allowances3
Accrued special charges4
Equity equivalents5
Accumulated other comprehensive (income) loss, net of tax6
Adjusted shareholders’ equity
Short-term investments7
Invested capital

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).

1 Addition of capitalized operating leases.

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

3 Addition of allowance for doubtful accounts receivable.

4 Addition of accrued special charges.

5 Addition of equity equivalents to shareholders’ equity.

6 Removal of accumulated other comprehensive income.

7 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. Analog Devices Inc.’s invested capital decreased from 2018 to 2019 and from 2019 to 2020.

Cost of Capital

Analog 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: 2020-11-24).

1 US$ in thousands

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: 2019-11-26).

1 US$ in thousands

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 – 23.40%) =
Operating lease liability4 ÷ = × × (1 – 23.40%) =
Total:

Based on: 10-K (filing date: 2018-11-27).

1 US$ in thousands

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: 2017-11-22).

1 US$ in thousands

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: 2016-11-22).

1 US$ in thousands

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: 2015-11-24).

1 US$ in thousands

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Economic Spread Ratio

Analog Devices Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Oct 31, 2020 Nov 2, 2019 Nov 3, 2018 Oct 28, 2017 Oct 29, 2016 Oct 31, 2015
Selected Financial Data (US$ in thousands)
Economic profit1
Invested capital2
Performance Ratio
Economic spread ratio3
Benchmarks
Economic Spread Ratio, Competitors4
Advanced Micro Devices Inc.
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: 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).

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. Analog Devices Inc.’s economic spread ratio improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020 not reaching 2018 level.

Economic Profit Margin

Analog Devices Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Oct 31, 2020 Nov 2, 2019 Nov 3, 2018 Oct 28, 2017 Oct 29, 2016 Oct 31, 2015
Selected Financial Data (US$ in thousands)
Economic profit1
Revenue
Performance Ratio
Economic profit margin2
Benchmarks
Economic Profit Margin, Competitors3
Advanced Micro Devices Inc.
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: 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).

1 Economic profit. See details »

2 2020 Calculation
Economic profit margin = 100 × Economic profit ÷ 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. Analog Devices Inc.’s economic profit margin improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020 not reaching 2018 level.