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 – 17.23% × 42,071,671 = -5,061,671
The financial analysis indicates a period of sustained negative economic profit, where the returns generated from operations were consistently insufficient to cover the cost of invested capital. While operating profits showed volatility and a peak in 2023, the substantial increase in the capital base since 2021 has created a high threshold for value creation that the company has yet to surpass.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibited significant volatility over the analyzed period. After a slight decline between 2020 and 2021, there was a sharp upward trajectory, peaking at 3,141,095 thousand US$ in 2023. This growth was followed by a substantial contraction to 1,343,155 thousand US$ in 2024, before recovering to 2,187,350 thousand US$ by November 2025.
- Invested Capital and Cost of Capital
- A critical shift in the capital structure occurred between 2020 and 2021, with invested capital increasing from 18,211,243 thousand US$ to 47,018,398 thousand US$. Following this surge, the capital base entered a phase of gradual decline, reducing to 42,071,671 thousand US$ by 2025. Throughout this period, the cost of capital remained highly stable, fluctuating minimally between 16.56% and 17.24%.
- Economic Profit Trends
- Economic profit remained negative across all recorded years, signaling a failure to generate economic value added. The most severe deficit occurred in 2021, reaching -6,896,789 thousand US$, which coincided with the peak in invested capital. Despite an improvement in 2023—where economic profit reached its least negative point of -4,446,399 thousand US$ due to peak NOPAT—the trend returned to a deficit of -5,061,671 thousand US$ by 2025. The persistence of these negative figures suggests that the current scale of invested capital is not being utilized efficiently enough to yield returns exceeding the 17% cost of capital threshold.
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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 $42.1 billion in 2025. The decrease in invested capital alongside the declining equity suggests a strategic reduction or reallocation of invested resources, possibly through asset divestitures or operational efficiencies.
- Total Reported Debt & Leases
- Displays a steady increase, implying greater leverage or lease commitments over the analyzed period.
- Shareholders’ Equity
- Exhibits a significant increase followed by a gradual but persistent decline, indicating shifts in retained earnings, dividends, or capital management strategies.
- Invested Capital
- Rises sharply early on, then decreases gradually, reflecting changes in asset base investment and capital deployment.
Overall, the data suggest a financial strategy characterized by increased debt utilization, initial capital accumulation or revaluation, and subsequent capital base contraction. This pattern should be further examined in the context of profitability, cash flow, and market conditions to assess sustainability and risk implications.
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Cost of Capital
Analog Devices Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 123,402,626) | 123,402,626) | ÷ | 131,742,653) | = | 0.94 | 0.94 | × | 18.20% | = | 17.05% | ||
| Debt3 | 7,983,218) | 7,983,218) | ÷ | 131,742,653) | = | 0.06 | 0.06 | × | 3.61% × (1 – 21.00%) | = | 0.17% | ||
| Operating lease liability4 | 356,809) | 356,809) | ÷ | 131,742,653) | = | 0.00 | 0.00 | × | 3.90% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 131,742,653) | 1.00 | 17.23% | ||||||||||
Based on: 10-K (reporting date: 2025-11-01).
1 US$ 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 | × | 18.20% | = | 17.07% | ||
| 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 | 17.24% | ||||||||||
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 | × | 18.20% | = | 17.02% | ||
| 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 | 17.17% | ||||||||||
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 | × | 18.20% | = | 17.04% | ||
| 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 | 17.19% | ||||||||||
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 | × | 18.20% | = | 16.87% | ||
| 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 | 17.04% | ||||||||||
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 | × | 18.20% | = | 16.26% | ||
| 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 | 16.56% | ||||||||||
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 | (5,061,671) | (6,159,999) | (4,446,399) | (5,145,061) | (6,896,789) | (1,749,998) | |
| 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 | -12.03% | -14.15% | -10.06% | -11.43% | -14.67% | -9.61% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Advanced Micro Devices Inc. | -21.11% | -27.37% | -28.80% | -28.42% | 28.16% | — | |
| Applied Materials Inc. | 17.27% | 10.37% | 13.36% | 23.33% | 18.82% | 7.16% | |
| Broadcom Inc. | -2.94% | -10.36% | 4.87% | 3.61% | -5.62% | -10.85% | |
| Intel Corp. | -18.62% | -29.96% | -19.83% | -13.05% | 3.54% | — | |
| KLA Corp. | 20.58% | 16.23% | 20.17% | 22.57% | 11.03% | — | |
| Lam Research Corp. | 12.15% | -2.98% | 2.38% | 17.40% | 12.74% | — | |
| Marvell Technology Inc. | -26.42% | -26.46% | -22.13% | -24.89% | -26.61% | — | |
| Micron Technology Inc. | -5.75% | -17.66% | -29.62% | -1.97% | -6.58% | -12.02% | |
| NVIDIA Corp. | 117.48% | 62.03% | -16.05% | 26.14% | 6.62% | — | |
| Qualcomm Inc. | 12.49% | 7.70% | 0.23% | 26.66% | 24.06% | 9.13% | |
| Texas Instruments Inc. | 2.39% | 2.70% | 12.32% | 32.90% | 31.54% | — | |
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 × -5,061,671 ÷ 42,071,671 = -12.03%
4 Click competitor name to see calculations.
The analysis of economic value added indicates a persistent failure to generate positive economic profit over the observed period. From October 2020 through November 2025, the organization consistently operated below its cost of capital, resulting in sustained negative economic profit values.
- Economic Profit Trends
- A significant deterioration in economic profit is observed between 2020 and 2021, where losses widened from approximately $1.75 billion to $6.90 billion. While a modest recovery trend was evident through 2023, a subsequent decline occurred in 2024, with losses increasing to $6.16 billion before moderating to $5.06 billion by November 2025.
- Invested Capital Dynamics
- A substantial increase in invested capital occurred in 2021, rising sharply from $18.21 billion to $47.02 billion. This expansion coincides with the period of maximum economic loss. Following this peak, a gradual and consistent downward trajectory in invested capital is observed, reaching $42.07 billion by the end of the period.
- Economic Spread Ratio Performance
- The economic spread ratio remained negative throughout the entire period, fluctuating between -9.61% and -14.67%. The most pronounced negative spread was recorded in 2021 at -14.67%, aligning with the surge in invested capital. A secondary decline to -14.15% was observed in 2024, illustrating ongoing volatility in capital efficiency and a failure to achieve a positive spread where returns exceed the cost of capital.
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Economic Profit Margin
Analog Devices Inc., economic profit margin calculation, comparison to benchmarks
| Nov 1, 2025 | Nov 2, 2024 | Oct 28, 2023 | Oct 29, 2022 | Oct 30, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | (5,061,671) | (6,159,999) | (4,446,399) | (5,145,061) | (6,896,789) | (1,749,998) | |
| Revenue | 11,019,707) | 9,427,157) | 12,305,539) | 12,013,953) | 7,318,286) | 5,603,056) | |
| Performance Ratio | |||||||
| Economic profit margin2 | -45.93% | -65.34% | -36.13% | -42.83% | -94.24% | -31.23% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Advanced Micro Devices Inc. | -37.61% | -61.81% | -73.50% | -70.47% | 10.61% | — | |
| Applied Materials Inc. | 12.25% | 7.22% | 8.96% | 13.47% | 12.01% | 5.45% | |
| Broadcom Inc. | -6.91% | -28.32% | 8.52% | 6.76% | -13.24% | -29.94% | |
| Intel Corp. | -41.07% | -52.08% | -33.68% | -18.36% | 3.97% | — | |
| KLA Corp. | 15.74% | 13.93% | 16.02% | 19.08% | 10.87% | — | |
| Lam Research Corp. | 10.15% | -3.02% | 2.09% | 12.85% | 10.28% | — | |
| Marvell Technology Inc. | -81.64% | -91.49% | -74.77% | -111.07% | -81.68% | — | |
| Micron Technology Inc. | -9.41% | -37.51% | -101.90% | -3.38% | -11.01% | -23.72% | |
| NVIDIA Corp. | 42.55% | 31.32% | -12.70% | 17.52% | 5.17% | — | |
| Qualcomm Inc. | 8.83% | 6.10% | 0.20% | 17.76% | 14.49% | 6.89% | |
| Texas Instruments Inc. | 3.86% | 4.52% | 15.89% | 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 × -5,061,671 ÷ 11,019,707 = -45.93%
3 Click competitor name to see calculations.
The financial performance regarding economic value added reflects a consistent inability to generate returns exceeding the cost of capital over the period from October 2020 to November 2025. Economic value creation has remained negative throughout the entire timeframe, indicating that the company has not achieved its required rate of return on invested capital.
- Economic Profit Trends
- Economic profit remained consistently negative, characterized by significant volatility. A sharp increase in economic loss was observed between 2020 and 2021, with the deficit expanding from 1.75 billion USD to 6.90 billion USD. A gradual recovery phase occurred between 2021 and 2023, during which the deficit was reduced to 4.45 billion USD. However, this trend reversed in 2024 as losses widened again to 6.16 billion USD, before moderating to 5.06 billion USD in 2025.
- Revenue Trajectory
- Revenue experienced a strong growth phase from 2020 to 2023, rising from 5.60 billion USD to a peak of 12.31 billion USD. A significant contraction was recorded in 2024, with revenue dropping to 9.43 billion USD, followed by a partial recovery to 11.02 billion USD by November 2025. The lack of a direct correlation between revenue growth and economic profit suggests that increased scale did not translate into economic value creation.
- Economic Profit Margin Analysis
- The economic profit margin remained negative across all reported years, underscoring persistent value erosion. The most acute deterioration occurred in 2021, where the margin fell to -94.24%. Although the margin improved to -36.13% by 2023, a secondary decline to -65.34% was observed in 2024. By 2025, the margin stood at -45.93%, indicating that for every dollar of revenue generated, the company continued to fail in meeting its cost of capital requirements.
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