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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
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Analog Devices Inc., economic profit calculation

US$ in thousands

12 months ended:	Oct 28, 2023	Oct 29, 2022	Oct 30, 2021	Oct 31, 2020	Nov 2, 2019	Nov 3, 2018
Net operating profit after taxes (NOPAT)¹	3,141,095)	2,594,637)	1,115,726)	1,265,150)	1,510,496)	927,190)
Cost of capital²	13.98%	14.00%	13.88%	13.51%	13.26%	12.79%
Invested capital³	44,182,132)	45,019,927)	47,018,398)	18,211,243)	18,347,668)	18,624,001)

Economic profit⁴	(3,036,458)	(3,706,573)	(5,409,165)	(1,194,625)	(922,239)	(1,454,626)

Based on: 10-K (reporting date: 2023-10-28), 10-K (reporting date: 2022-10-29), 10-K (reporting date: 2021-10-30), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-11-02), 10-K (reporting date: 2018-11-03).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 3,141,095 – 13.98% × 44,182,132 = -3,036,458

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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. economic profit increased from 2021 to 2022 and from 2022 to 2023.

Analog Devices Inc., NOPAT calculation

US$ in thousands

12 months ended:	Oct 28, 2023	Oct 29, 2022	Oct 30, 2021	Oct 31, 2020	Nov 2, 2019	Nov 3, 2018
Net income	3,314,579)	2,748,561)	1,390,422)	1,220,761)	1,363,011)	1,495,432)
Deferred income tax expense (benefit)¹	(452,946)	(326,755)	(406,922)	(113,948)	(91,253)	(736,759)
Increase (decrease) in allowances²	(1,808)	1,913)	(1,692)	(4,037)	6,103)	(4,929)
Increase (decrease) in accrued special charges³	92,728)	7,860)	(19,111)	5,021)	49,266)	(22,195)
Increase (decrease) in equity equivalents⁴	(362,026)	(316,982)	(427,725)	(112,964)	(35,884)	(763,883)
Interest expense	264,641)	200,408)	184,825)	193,305)	229,075)	253,589)
Interest expense, operating lease liability⁵	15,307)	12,900)	10,102)	10,181)	13,266)	11,200)
Adjusted interest expense	279,948)	213,308)	194,927)	203,486)	242,341)	264,789)
Tax benefit of interest expense⁶	(58,789)	(44,795)	(40,935)	(42,732)	(50,892)	(61,961)
Adjusted interest expense, after taxes⁷	221,159)	168,513)	153,993)	160,754)	191,450)	202,829)
Interest income	(41,287)	(6,906)	(1,220)	(4,305)	(10,229)	(9,383)
Investment income, before taxes	(41,287)	(6,906)	(1,220)	(4,305)	(10,229)	(9,383)
Tax expense (benefit) of investment income⁸	8,670)	1,450)	256)	904)	2,148)	2,196)
Investment income, after taxes⁹	(32,617)	(5,456)	(964)	(3,401)	(8,081)	(7,187)
Net operating profit after taxes (NOPAT)	3,141,095)	2,594,637)	1,115,726)	1,265,150)	1,510,496)	927,190)

Based on: 10-K (reporting date: 2023-10-28), 10-K (reporting date: 2022-10-29), 10-K (reporting date: 2021-10-30), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-11-02), 10-K (reporting date: 2018-11-03).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowances.

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

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

⁵ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 425,205 × 3.60% = 15,307

⁶ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 279,948 × 21.00% = 58,789

⁷ Addition of after taxes interest expense to net income.

⁸ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 41,287 × 21.00% = 8,670

⁹ Elimination of after taxes investment income.

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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. NOPAT increased from 2021 to 2022 and from 2022 to 2023.

Analog Devices Inc., cash operating taxes calculation

US$ in thousands

12 months ended:	Oct 28, 2023	Oct 29, 2022	Oct 30, 2021	Oct 31, 2020	Nov 2, 2019	Nov 3, 2018
Provision for (benefit from) income tax	293,424)	350,188)	(61,708)	90,856)	122,717)	143,085)
Less: Deferred income tax expense (benefit)	(452,946)	(326,755)	(406,922)	(113,948)	(91,253)	(736,759)
Add: Tax savings from interest expense	58,789)	44,795)	40,935)	42,732)	50,892)	61,961)
Less: Tax imposed on investment income	8,670)	1,450)	256)	904)	2,148)	2,196)
Cash operating taxes	796,489)	720,287)	385,893)	246,632)	262,714)	939,609)

Based on: 10-K (reporting date: 2023-10-28), 10-K (reporting date: 2022-10-29), 10-K (reporting date: 2021-10-30), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-11-02), 10-K (reporting date: 2018-11-03).

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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. cash operating taxes increased from 2021 to 2022 and from 2022 to 2023.

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

US$ in thousands

	Oct 28, 2023	Oct 29, 2022	Oct 30, 2021	Oct 31, 2020	Nov 2, 2019	Nov 3, 2018
Debt, current	499,052)	—)	516,663)	—)	299,667)	67,000)
Commercial paper notes	547,224)	—)	—)	—)	—)	—)
Long-term debt, excluding current	5,902,457)	6,548,625)	6,253,212)	5,145,102)	5,192,252)	6,265,674)
Operating lease liability¹	425,205)	390,907)	348,358)	328,415)	380,127)	320,923)
Total reported debt & leases	7,373,938)	6,939,532)	7,118,233)	5,473,517)	5,872,046)	6,653,597)
Shareholders’ equity	35,565,122)	36,465,323)	37,992,542)	11,997,945)	11,709,188)	10,988,540)
Net deferred tax (assets) liabilities²	904,580)	1,357,650)	1,671,561)	416,531)	505,830)	905,987)
Allowances³	2,763)	4,571)	2,658)	4,350)	8,387)	2,284)
Accrued special charges⁴	147,427)	54,699)	46,839)	69,439)	64,418)	15,153)
Equity equivalents⁵	1,054,770)	1,416,920)	1,721,058)	490,320)	578,635)	923,424)
Accumulated other comprehensive (income) loss, net of tax⁶	188,302)	198,152)	186,565)	249,461)	187,799)	58,440)
Adjusted shareholders’ equity	36,808,194)	38,080,395)	39,900,165)	12,737,726)	12,475,622)	11,970,404)
Invested capital	44,182,132)	45,019,927)	47,018,398)	18,211,243)	18,347,668)	18,624,001)

Based on: 10-K (reporting date: 2023-10-28), 10-K (reporting date: 2022-10-29), 10-K (reporting date: 2021-10-30), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-11-02), 10-K (reporting date: 2018-11-03).

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.

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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. invested capital decreased from 2021 to 2022 and from 2022 to 2023.

Analog Devices Inc., cost of capital calculations

Oct 28, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	89,947,429)	89,947,429)	÷	96,216,918)	=	0.93	0.93	×	14.79%	=	13.82%
Debt³	5,844,284)	5,844,284)	÷	96,216,918)	=	0.06	0.06	×	3.03% × (1 – 21.00%)	=	0.15%
Operating lease liability⁴	425,205)	425,205)	÷	96,216,918)	=	0.00	0.00	×	3.60% × (1 – 21.00%)	=	0.01%
Total:	96,216,918)					1.00					13.98%

Based on: 10-K (reporting date: 2023-10-28).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Oct 29, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	85,780,715)	85,780,715)	÷	91,644,227)	=	0.94	0.94	×	14.79%	=	13.84%
Debt³	5,472,605)	5,472,605)	÷	91,644,227)	=	0.06	0.06	×	3.05% × (1 – 21.00%)	=	0.14%
Operating lease liability⁴	390,907)	390,907)	÷	91,644,227)	=	0.00	0.00	×	3.30% × (1 – 21.00%)	=	0.01%
Total:	91,644,227)					1.00					14.00%

Based on: 10-K (reporting date: 2022-10-29).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Oct 30, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	94,974,532)	94,974,532)	÷	102,470,497)	=	0.93	0.93	×	14.79%	=	13.71%
Debt³	7,147,607)	7,147,607)	÷	102,470,497)	=	0.07	0.07	×	2.97% × (1 – 21.00%)	=	0.16%
Operating lease liability⁴	348,358)	348,358)	÷	102,470,497)	=	0.00	0.00	×	2.90% × (1 – 21.00%)	=	0.01%
Total:	102,470,497)					1.00					13.88%

Based on: 10-K (reporting date: 2021-10-30).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Oct 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	50,578,788)	50,578,788)	÷	56,616,198)	=	0.89	0.89	×	14.79%	=	13.21%
Debt³	5,708,995)	5,708,995)	÷	56,616,198)	=	0.10	0.10	×	3.54% × (1 – 21.00%)	=	0.28%
Operating lease liability⁴	328,415)	328,415)	÷	56,616,198)	=	0.01	0.01	×	3.10% × (1 – 21.00%)	=	0.01%
Total:	56,616,198)					1.00					13.51%

Based on: 10-K (reporting date: 2020-10-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Nov 2, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	42,314,259)	42,314,259)	÷	48,472,922)	=	0.87	0.87	×	14.79%	=	12.91%
Debt³	5,778,535)	5,778,535)	÷	48,472,922)	=	0.12	0.12	×	3.49% × (1 – 21.00%)	=	0.33%
Operating lease liability⁴	380,127)	380,127)	÷	48,472,922)	=	0.01	0.01	×	3.49% × (1 – 21.00%)	=	0.02%
Total:	48,472,922)					1.00					13.26%

Based on: 10-K (reporting date: 2019-11-02).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Nov 3, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	33,158,893)	33,158,893)	÷	39,710,464)	=	0.84	0.84	×	14.79%	=	12.35%
Debt³	6,230,648)	6,230,648)	÷	39,710,464)	=	0.16	0.16	×	3.49% × (1 – 23.40%)	=	0.42%
Operating lease liability⁴	320,923)	320,923)	÷	39,710,464)	=	0.01	0.01	×	3.49% × (1 – 23.40%)	=	0.02%
Total:	39,710,464)					1.00					12.79%

Based on: 10-K (reporting date: 2018-11-03).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

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

	Oct 28, 2023	Oct 29, 2022	Oct 30, 2021	Oct 31, 2020	Nov 2, 2019	Nov 3, 2018
Selected Financial Data (US$ in thousands)
Economic profit¹	(3,036,458)	(3,706,573)	(5,409,165)	(1,194,625)	(922,239)	(1,454,626)
Invested capital²	44,182,132)	45,019,927)	47,018,398)	18,211,243)	18,347,668)	18,624,001)
Performance Ratio
Economic spread ratio³	-6.87%	-8.23%	-11.50%	-6.56%	-5.03%	-7.81%
Benchmarks
Economic Spread Ratio, Competitors⁴
Advanced Micro Devices Inc.	-19.23%	-18.95%	37.78%	11.52%	-6.61%	—
Applied Materials Inc.	19.04%	28.90%	24.43%	12.60%	12.22%	20.29%
Broadcom Inc.	9.61%	8.03%	-1.35%	-6.90%	-6.60%	-2.39%
Intel Corp.	-13.28%	-6.85%	10.34%	16.01%	14.10%	—
KLA Corp.	25.21%	27.46%	16.13%	4.97%	6.46%	24.63%
Lam Research Corp.	11.51%	26.12%	25.58%	8.58%	5.12%	10.28%
Micron Technology Inc.	-25.50%	2.34%	-2.19%	-7.80%	2.38%	24.98%
NVIDIA Corp.	-8.90%	33.30%	13.73%	-0.27%	60.33%	—
ON Semiconductor Corp.	0.42%	2.32%	-2.03%	-13.35%	-9.90%	—
Qualcomm Inc.	3.75%	30.19%	27.59%	12.63%	14.02%	-30.65%
Texas Instruments Inc.	15.72%	36.39%	35.00%	30.15%	29.83%	—

Based on: 10-K (reporting date: 2023-10-28), 10-K (reporting date: 2022-10-29), 10-K (reporting date: 2021-10-30), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-11-02), 10-K (reporting date: 2018-11-03).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -3,036,458 ÷ 44,182,132 = -6.87%

⁴ Click competitor name to see calculations.

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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. economic spread ratio improved from 2021 to 2022 and from 2022 to 2023.

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

	Oct 28, 2023	Oct 29, 2022	Oct 30, 2021	Oct 31, 2020	Nov 2, 2019	Nov 3, 2018
Selected Financial Data (US$ in thousands)
Economic profit¹	(3,036,458)	(3,706,573)	(5,409,165)	(1,194,625)	(922,239)	(1,454,626)
Revenue	12,305,539)	12,013,953)	7,318,286)	5,603,056)	5,991,065)	6,200,942)
Performance Ratio
Economic profit margin²	-24.68%	-30.85%	-73.91%	-21.32%	-15.39%	-23.46%
Benchmarks
Economic Profit Margin, Competitors³
Advanced Micro Devices Inc.	-49.09%	-46.99%	14.24%	5.15%	-3.35%	—
Applied Materials Inc.	12.76%	16.69%	15.59%	9.59%	8.47%	11.98%
Broadcom Inc.	16.81%	15.02%	-3.18%	-19.05%	-17.54%	-5.11%
Intel Corp.	-22.55%	-9.64%	11.58%	16.86%	15.79%	—
KLA Corp.	20.03%	23.21%	15.89%	5.56%	9.02%	15.96%
Lam Research Corp.	10.02%	18.95%	18.26%	8.40%	4.47%	8.95%
Micron Technology Inc.	-87.75%	4.01%	-3.66%	-15.38%	3.95%	29.11%
NVIDIA Corp.	-7.04%	22.32%	10.73%	-0.34%	24.63%	—
ON Semiconductor Corp.	0.55%	2.61%	-2.28%	-17.50%	-12.30%	—
Qualcomm Inc.	3.29%	20.11%	16.62%	9.53%	12.38%	-25.36%
Texas Instruments Inc.	20.27%	31.91%	31.31%	27.03%	25.01%	—

Based on: 10-K (reporting date: 2023-10-28), 10-K (reporting date: 2022-10-29), 10-K (reporting date: 2021-10-30), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-11-02), 10-K (reporting date: 2018-11-03).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenue
= 100 × -3,036,458 ÷ 12,305,539 = -24.68%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company 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. economic profit margin improved from 2021 to 2022 and from 2022 to 2023.

Analog Devices Inc. (NASDAQ:ADI)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin