Economic Value Added (EVA)
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
Based on: 10-K (reporting date: 2025-11-01), 10-K (reporting date: 2024-11-02), 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).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 2,187,350 – 17.26% × 42,071,671 = -5,072,667
The financial performance regarding economic value added exhibits a persistent deficit across the analyzed period. Despite fluctuations in operational profit, the company has consistently failed to generate positive economic profit, indicating that the returns on invested capital remain below the required cost of capital.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT demonstrates significant volatility. After an initial period of stability, a substantial increase occurred between 2021 and 2023, peaking at $3,141,095 thousand. However, a sharp contraction was observed in 2024, with a subsequent partial recovery to $2,187,350 thousand by 2025.
- Invested Capital and Cost of Capital
- A dramatic expansion in invested capital occurred between 2020 and 2021, increasing from $18,211,243 thousand to $47,018,398 thousand. Following this peak, a gradual and consistent reduction in invested capital is observed through 2025. Throughout this period, the cost of capital remained remarkably stable, fluctuating narrowly between 16.58% and 17.27%.
- Economic Profit Analysis
- Economic profit remained negative for all six years, signaling a sustained inability to cover the cost of capital with operating profits. The most severe deficit occurred in 2021, reaching -$6,908,948 thousand, which correlates with the sudden surge in invested capital. While the deficit narrowed to its lowest point in 2023 (-$4,457,924 thousand), the overall trend indicates a continuing destruction of economic value.
The correlation between the surge in invested capital in 2021 and the deepening of the economic profit deficit suggests that the capital expansion did not yield immediate or sufficient operating returns to justify its cost. Although NOPAT improved significantly in 2022 and 2023, these gains were insufficient to flip the economic profit into positive territory given the scale of the capital base.
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Net Operating Profit after Taxes (NOPAT)
Analog Devices Inc., NOPAT calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-11-01), 10-K (reporting date: 2024-11-02), 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).
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 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 356,809 × 3.90% = 13,916
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 331,632 × 21.00% = 69,643
7 Addition of after taxes interest expense to net income.
8 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 105,266 × 21.00% = 22,106
9 Elimination of after taxes investment income.
- Net Income Trend
- The net income exhibits a generally positive trend with some fluctuations over the analyzed periods. From October 31, 2020, to October 30, 2021, net income increased moderately from approximately $1.22 billion to $1.39 billion. A significant surge is observed in the following year ending October 29, 2022, where net income almost doubles to about $2.75 billion. This upward trajectory continues into October 28, 2023, peaking near $3.31 billion. However, there is a notable decline in the subsequent year on November 2, 2024, with net income dropping to approximately $1.64 billion. The final period, November 1, 2025, sees a recovery with net income rising again to around $2.27 billion, though it remains below the peak of 2023.
- NOPAT Trend
- Net Operating Profit After Taxes (NOPAT) shows a trend broadly aligned with net income, suggesting operational performance closely mirrors overall profitability. Initially, NOPAT decreases from about $1.27 billion in 2020 to approximately $1.12 billion in 2021. This is followed by a marked increase in 2022 to roughly $2.59 billion and continues to rise to around $3.14 billion by 2023. Similar to net income, NOPAT experiences a decline in November 2024, falling to about $1.34 billion, before recovering to approximately $2.19 billion in November 2025.
- Comparative Insights
- The parallel movements in net income and NOPAT imply that variations in profitability are largely driven by operating performance rather than shifts in non-operating activities or tax impacts. Both metrics demonstrate substantial growth between 2021 and 2023, reflecting a period of strong operational efficiency or favorable market conditions. The decrease seen in 2024 may indicate operational challenges, increased costs, or external factors adversely affecting profitability, followed by partial recovery in 2025.
- Overall Observations
- Over the six-year span, the company experienced significant growth in profitability metrics with a peak in 2023. The subsequent dip in 2024 suggests some volatility or transitional challenges that warrant further investigation. The recovery in 2025 indicates resilience and improvement but does not reach prior peak levels by the end of the observed period. Continued monitoring of operational efficiency and market conditions would be advisable to sustain or improve profitability.
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Cash Operating Taxes
Analog Devices Inc., cash operating taxes calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-11-01), 10-K (reporting date: 2024-11-02), 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).
- Provision for (benefit from) income tax
- The provision for income tax exhibits significant volatility across the observed periods. In the fiscal year ending October 31, 2020, the provision was a positive amount of approximately $90.9 million, suggesting a recorded tax expense. However, in the subsequent year, there was a notable reversal to a tax benefit of approximately $61.7 million. Following this, the provision returned to a substantial tax expense, peaking at about $350.2 million in 2022 and sustaining relatively high values through 2023 and beyond, with figures of approximately $293.4 million, $142.1 million, and $444.8 million for the years ending October 28, 2023, November 2, 2024, and November 1, 2025, respectively. This fluctuation might indicate changes in taxable income, tax planning strategies, or adjustments in deferred tax assets and liabilities.
- Cash operating taxes
- Cash paid for operating taxes has shown a consistent upward trend over the reported years, indicating increasing cash outflows related to tax payments. Starting at approximately $246.6 million for the fiscal year ending October 31, 2020, it rose to $385.9 million in 2021 and then nearly doubled to about $720.3 million in 2022. The upward trajectory continued, reaching $796.5 million in 2023. There is a slight dip in the following year to $563.8 million in 2024, but the amount increases again to around $739.0 million in 2025. This pattern suggests that while some years experienced a temporary reduction, the overall cash tax burden has increased substantially, potentially reflecting higher taxable earnings or changes in tax legislation or company operations affecting cash tax payments.
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Invested Capital
Analog Devices Inc., invested capital calculation (financing approach)
US$ in thousands
Based on: 10-K (reporting date: 2025-11-01), 10-K (reporting date: 2024-11-02), 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).
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.
The analysis of the financial data reveals distinct trends in the company's capital structure over the six-year period under review. The total reported debt and leases demonstrate a consistent upward trajectory, increasing from approximately $5.47 billion in late 2020 to nearly $8.95 billion by late 2025. This growth indicates an increasing reliance on debt financing or lease commitments over time, reflecting either an expansion in operations, capital expenditures, or refinancing activities.
Conversely, shareholders’ equity experienced a notable surge between 2020 and 2021, rising sharply from roughly $12.0 billion to nearly $38.0 billion. However, following this spike, equity levels have gradually declined each subsequent year, decreasing to about $33.8 billion by 2025. This downward trend could suggest factors such as dividend distributions exceeding net income, share repurchases, or accumulated losses, which have eroded equity after its initial increase.
Invested capital, representing the total funds invested in the company’s operations, similarly rose steeply from $18.2 billion in 2020 to $47.0 billion in 2021. Following this peak, invested capital steadily declined year-over-year, falling to approximately $42.1 billion in 2025. The decrease in invested capital alongside the declining equity suggests a strategic reduction or reallocation of invested resources, possibly through asset divestitures or operational efficiencies.
- Total Reported Debt & Leases
- Displays a steady increase, implying greater leverage or lease commitments over the analyzed period.
- Shareholders’ Equity
- Exhibits a significant increase followed by a gradual but persistent decline, indicating shifts in retained earnings, dividends, or capital management strategies.
- Invested Capital
- Rises sharply early on, then decreases gradually, reflecting changes in asset base investment and capital deployment.
Overall, the data suggest a financial strategy characterized by increased debt utilization, initial capital accumulation or revaluation, and subsequent capital base contraction. This pattern should be further examined in the context of profitability, cash flow, and market conditions to assess sustainability and risk implications.
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Cost of Capital
Analog Devices Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 123,402,626) | 123,402,626) | ÷ | 131,742,653) | = | 0.94 | 0.94 | × | 18.23% | = | 17.08% | ||
| Debt3 | 7,983,218) | 7,983,218) | ÷ | 131,742,653) | = | 0.06 | 0.06 | × | 3.61% × (1 – 21.00%) | = | 0.17% | ||
| Operating lease liability4 | 356,809) | 356,809) | ÷ | 131,742,653) | = | 0.00 | 0.00 | × | 3.90% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 131,742,653) | 1.00 | 17.26% | ||||||||||
Based on: 10-K (reporting date: 2025-11-01).
1 US$ 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 | 108,713,826) | 108,713,826) | ÷ | 115,898,467) | = | 0.94 | 0.94 | × | 18.23% | = | 17.10% | ||
| Debt3 | 6,797,941) | 6,797,941) | ÷ | 115,898,467) | = | 0.06 | 0.06 | × | 3.40% × (1 – 21.00%) | = | 0.16% | ||
| Operating lease liability4 | 386,700) | 386,700) | ÷ | 115,898,467) | = | 0.00 | 0.00 | × | 3.80% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 115,898,467) | 1.00 | 17.27% | ||||||||||
Based on: 10-K (reporting date: 2024-11-02).
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 | 89,947,429) | 89,947,429) | ÷ | 96,216,918) | = | 0.93 | 0.93 | × | 18.23% | = | 17.04% | ||
| 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 | 17.20% | ||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 85,780,715) | 85,780,715) | ÷ | 91,644,227) | = | 0.94 | 0.94 | × | 18.23% | = | 17.06% | ||
| 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 | 17.22% | ||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 94,974,532) | 94,974,532) | ÷ | 102,470,497) | = | 0.93 | 0.93 | × | 18.23% | = | 16.90% | ||
| 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 | 17.07% | ||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 50,578,788) | 50,578,788) | ÷ | 56,616,198) | = | 0.89 | 0.89 | × | 18.23% | = | 16.29% | ||
| 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 | 16.58% | ||||||||||
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 »
Economic Spread Ratio
Analog Devices Inc., economic spread ratio calculation, comparison to benchmarks
| Nov 1, 2025 | Nov 2, 2024 | Oct 28, 2023 | Oct 29, 2022 | Oct 30, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | (5,072,667) | (6,171,389) | (4,457,924) | (5,156,819) | (6,908,948) | (1,754,538) | |
| Invested capital2 | 42,071,671) | 43,520,510) | 44,182,132) | 45,019,927) | 47,018,398) | 18,211,243) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | -12.06% | -14.18% | -10.09% | -11.45% | -14.69% | -9.63% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Advanced Micro Devices Inc. | -21.52% | -27.79% | -29.22% | -28.83% | 27.74% | — | |
| Applied Materials Inc. | 17.02% | 10.13% | 13.12% | 23.09% | 18.58% | 6.93% | |
| Broadcom Inc. | -3.00% | -10.42% | 4.81% | 3.56% | -5.68% | -10.90% | |
| Intel Corp. | -18.76% | -30.08% | -19.97% | -13.18% | 3.40% | — | |
| KLA Corp. | 20.42% | 16.08% | 20.01% | 22.42% | 10.88% | — | |
| Lam Research Corp. | 11.84% | -3.28% | 2.09% | 17.11% | 12.45% | — | |
| Marvell Technology Inc. | -26.67% | -26.71% | -22.37% | -25.14% | -26.87% | — | |
| Micron Technology Inc. | -5.88% | -17.78% | -29.73% | -2.10% | -6.71% | -12.14% | |
| NVIDIA Corp. | 117.11% | 61.66% | -16.42% | 25.78% | 6.26% | — | |
| Qualcomm Inc. | 12.40% | 7.60% | 0.13% | 26.57% | 23.96% | 9.03% | |
| Texas Instruments Inc. | 2.38% | 2.70% | 12.32% | 32.90% | 31.53% | — | |
Based on: 10-K (reporting date: 2025-11-01), 10-K (reporting date: 2024-11-02), 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).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -5,072,667 ÷ 42,071,671 = -12.06%
4 Click competitor name to see calculations.
The financial performance over the analyzed period is characterized by a consistent negative economic profit, indicating that the returns generated are insufficient to cover the cost of the capital employed. This state of value destruction has persisted from 2020 through the projected 2025 figures, with significant volatility observed in both absolute losses and the relative spread ratio.
- Invested Capital Trends
- A substantial increase in invested capital occurred between October 2020 and October 2021, rising from approximately 18.2 billion to 47.0 billion. Following this peak, a gradual and steady contraction is observed, with capital decreasing to 42.1 billion by November 2025. This suggests a period of aggressive expansion or acquisition in 2021, followed by a long-term trend of capital optimization or depreciation.
- Economic Profit Analysis
- Economic profit remained negative throughout the entire timeframe. The most significant deterioration occurred in 2021, where losses widened to 6.9 billion. Although a recovery trend was evident between 2022 and 2023, with losses narrowing to 4.5 billion, this progress was reversed in 2024 as losses expanded again to 6.2 billion before showing a partial recovery to 5.1 billion in 2025.
- Economic Spread Ratio Interpretation
- The economic spread ratio remains consistently negative, mirroring the trend of economic profit. The ratio reached its lowest point in 2021 at -14.69%, coinciding with the peak in invested capital. While the ratio improved to -10.09% by 2023, it experienced another sharp decline to -14.18% in 2024. The persistent negative values confirm that the return on invested capital has remained below the weighted average cost of capital across all periods.
The correlation between the spike in invested capital in 2021 and the subsequent deepening of the negative economic spread suggests that the expansion of the capital base did not yield immediate proportional returns. The inability to return the economic spread ratio to positive territory, despite a gradual reduction in invested capital, indicates ongoing challenges in achieving capital efficiency.
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Economic Profit Margin
Analog Devices Inc., economic profit margin calculation, comparison to benchmarks
| Nov 1, 2025 | Nov 2, 2024 | Oct 28, 2023 | Oct 29, 2022 | Oct 30, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | (5,072,667) | (6,171,389) | (4,457,924) | (5,156,819) | (6,908,948) | (1,754,538) | |
| Revenue | 11,019,707) | 9,427,157) | 12,305,539) | 12,013,953) | 7,318,286) | 5,603,056) | |
| Performance Ratio | |||||||
| Economic profit margin2 | -46.03% | -65.46% | -36.23% | -42.92% | -94.41% | -31.31% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Advanced Micro Devices Inc. | -38.35% | -62.75% | -74.56% | -71.49% | 10.46% | — | |
| Applied Materials Inc. | 12.08% | 7.05% | 8.79% | 13.33% | 11.85% | 5.27% | |
| Broadcom Inc. | -7.05% | -28.49% | 8.42% | 6.66% | -13.37% | -30.08% | |
| Intel Corp. | -41.39% | -52.27% | -33.91% | -18.54% | 3.81% | — | |
| KLA Corp. | 15.62% | 13.80% | 15.90% | 18.95% | 10.72% | — | |
| Lam Research Corp. | 9.90% | -3.33% | 1.83% | 12.63% | 10.04% | — | |
| Marvell Technology Inc. | -82.42% | -92.37% | -75.59% | -112.19% | -82.48% | — | |
| Micron Technology Inc. | -9.62% | -37.77% | -102.30% | -3.59% | -11.22% | -23.96% | |
| NVIDIA Corp. | 42.41% | 31.13% | -12.99% | 17.28% | 4.89% | — | |
| Qualcomm Inc. | 8.76% | 6.02% | 0.12% | 17.70% | 14.43% | 6.82% | |
| Texas Instruments Inc. | 3.86% | 4.51% | 15.88% | 28.85% | 28.21% | — | |
Based on: 10-K (reporting date: 2025-11-01), 10-K (reporting date: 2024-11-02), 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).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenue
= 100 × -5,072,667 ÷ 11,019,707 = -46.03%
3 Click competitor name to see calculations.
Analysis of the economic value added reveals a consistent failure to generate positive economic profit between October 2020 and November 2025. Throughout this period, the entity operated with an economic profit consistently below zero, indicating that the returns generated were insufficient to cover the cost of capital employed.
- Economic Profit Trends
- Economic profit remained negative across the entire timeframe, reaching its lowest point in October 2021 with a deficit of US$ 6.91 billion. While a relative improvement was observed from 2022 to 2023, where the deficit narrowed to US$ 4.46 billion, a subsequent decline occurred in November 2024 before a partial recovery to a deficit of US$ 5.07 billion in November 2025.
- Revenue Performance and Scaling
- Revenue exhibited a general growth trajectory from 2020 to 2023, peaking at US$ 12.31 billion. However, this expansion did not translate into positive economic value. A notable contraction in revenue occurred in November 2024, falling to US$ 9.43 billion, followed by an upward movement to US$ 11.02 billion in November 2025.
- Economic Profit Margin Volatility
- The economic profit margin demonstrated substantial fluctuation, ranging from a high of -31.31% in 2020 to a low of -94.41% in 2021. The sharp decline in 2021 indicates that the cost of capital or operational inefficiencies significantly outpaced revenue growth during that cycle. The margin remained volatile in subsequent years, ending at -46.03% in November 2025, confirming a persistent inability to achieve an economic break-even point relative to the revenue base.
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