Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company’s debt and equity structure. It measures business productivity performance.

Return on Invested Capital (ROIC)
Decomposition of ROIC
Operating Profit Margin (OPM)
Turnover of Capital (TO)
Effective Cash Tax Rate (CTR)

Analog Devices Inc., ROIC calculation, comparison to benchmarks

	Nov 2, 2019	Nov 3, 2018	Oct 28, 2017	Oct 29, 2016	Oct 31, 2015
Selected Financial Data (US$ in thousands)
Net operating profit after taxes (NOPAT)¹	1,510,496	927,190	74,740	925,163	622,219
Invested capital²	18,347,668	18,624,001	19,887,009	4,004,443	3,980,835
Performance Ratio
ROIC³	8.23%	4.98%	0.38%	23.10%	15.63%
Benchmarks
ROIC, Competitors⁴
Advanced Micro Devices Inc.	11.73%	13.53%	2.05%	-14.86%	-27.01%
Apple Inc.	98.34%	83.60%	101.81%	114.33%	142.21%
Applied Materials Inc.	28.91%	29.78%	31.69%	20.54%	11.10%
Broadcom Inc.	5.00%	10.03%	3.52%	-1.55%	15.58%
Cisco Systems Inc.	18.12%	2.85%	19.68%	23.64%	22.15%
Intel Corp.	26.74%	23.84%	10.03%	16.51%	17.27%
Lam Research Corp.	20.10%	25.72%	31.56%	10.67%	15.45%
Micron Technology Inc.	17.16%	39.70%	18.99%	-0.03%	19.13%
NVIDIA Corp.	79.86%	41.40%	40.74%	31.19%	28.18%
Qualcomm Inc.	27.80%	-16.06%	1.94%	27.09%	19.77%
Texas Instruments Inc.	43.15%	44.66%	32.30%	28.86%	24.07%

Based on: 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 Invested capital. See details »

³ 2019 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 1,510,496 ÷ 18,347,668 = 8.23%

⁴ Click competitor name to see calculations.

Performance ratio	Description	The company
ROIC	A measure of the periodic, after tax, cash-on-cash yield earned in the business.	Analog Devices Inc.’s ROIC improved from 2017 to 2018 and from 2018 to 2019.

Analog Devices Inc., decomposition of ROIC


	ROIC	=	OPM¹	×	TO²	×	1 – CTR³
Nov 2, 2019	8.23%	=	29.60%	×	0.33	×	85.18%
Nov 3, 2018	4.98%	=	30.11%	×	0.33	×	49.67%
Oct 28, 2017	0.38%	=	21.16%	×	0.26	×	6.92%
Oct 29, 2016	23.10%	=	30.31%	×	0.85	×	89.22%
Oct 31, 2015	15.63%	=	23.13%	×	0.86	×	78.30%

Based on: 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 Operating profit margin (OPM). See calculations »

² Turnover of capital (TO). See calculations »

³ Effective cash tax rate (CTR). See calculations »

The primary reason for the increase in return on invested capital (ROIC) over 2019 year is the decrease in effective cash tax rate (CTR).

Analog Devices Inc., OPM calculation, comparison to benchmarks

	Nov 2, 2019	Nov 3, 2018	Oct 28, 2017	Oct 29, 2016	Oct 31, 2015
Selected Financial Data (US$ in thousands)
Net operating profit after taxes (NOPAT)¹	1,510,496	927,190	74,740	925,163	622,219
Add: Cash operating taxes²	262,714	939,609	1,005,861	111,817	172,460
Net operating profit before taxes (NOPBT)	1,773,209	1,866,799	1,080,602	1,036,980	794,680

Revenue	5,991,065	6,200,942	5,107,503	3,421,409	3,435,092
Profitability Ratio
OPM³	29.60%	30.11%	21.16%	30.31%	23.13%
Benchmarks
OPM, Competitors⁴
Advanced Micro Devices Inc.	6.80%	5.88%	2.42%	-5.94%	-12.88%
Apple Inc.	24.64%	26.58%	26.64%	26.39%	30.76%
Applied Materials Inc.	23.89%	26.89%	29.01%	22.15%	17.40%
Broadcom Inc.	15.65%	24.22%	12.14%	-2.93%	24.07%
Cisco Systems Inc.	25.46%	26.21%	27.94%	27.26%	23.84%
Intel Corp.	33.40%	30.95%	26.66%	21.44%	25.84%
Lam Research Corp.	20.46%	29.43%	27.76%	18.88%	18.03%
Micron Technology Inc.	29.90%	47.86%	28.39%	1.37%	21.09%
NVIDIA Corp.	33.09%	32.77%	24.50%	14.96%	15.98%
Qualcomm Inc.	29.51%	1.66%	9.49%	26.07%	20.11%
Texas Instruments Inc.	40.81%	43.25%	41.06%	37.64%	32.94%

Based on: 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 Cash operating taxes. See details »

³ 2019 Calculation
OPM = 100 × NOPBT ÷ Revenue
= 100 × 1,773,209 ÷ 5,991,065 = 29.60%

⁴ Click competitor name to see calculations.

Profitability ratio	Description	The company
OPM	The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales.	Analog Devices Inc.’s OPM improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Analog Devices Inc., TO calculation, comparison to benchmarks

	Nov 2, 2019	Nov 3, 2018	Oct 28, 2017	Oct 29, 2016	Oct 31, 2015
Selected Financial Data (US$ in thousands)
Revenue	5,991,065	6,200,942	5,107,503	3,421,409	3,435,092
Invested capital¹	18,347,668	18,624,001	19,887,009	4,004,443	3,980,835
Efficiency Ratio
TO²	0.33	0.33	0.26	0.85	0.86
Benchmarks
TO, Competitors³
Advanced Micro Devices Inc.	1.97	2.43	2.39	1.90	1.82
Apple Inc.	4.79	8.83	4.47	5.26	6.05
Applied Materials Inc.	1.44	1.52	1.20	1.09	0.83
Broadcom Inc.	0.38	0.47	0.35	0.29	0.81
Cisco Systems Inc.	0.95	1.00	0.87	1.04	1.13
Intel Corp.	0.89	0.94	0.94	0.92	0.91
Lam Research Corp.	1.15	1.15	1.15	0.64	0.95
Micron Technology Inc.	0.60	0.86	0.71	0.56	0.97
NVIDIA Corp.	2.45	1.50	1.71	2.08	1.89
Qualcomm Inc.	1.13	1.20	0.45	1.30	1.21
Texas Instruments Inc.	1.19	1.26	1.26	1.11	1.06

Based on: 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 Invested capital. See details »

² 2019 Calculation
TO = Revenue ÷ Invested capital
= 5,991,065 ÷ 18,347,668 = 0.33

³ Click competitor name to see calculations.

Efficiency ratio	Description	The company
TO	The turnover of capital (TO) is the ratio of sales to invested capital. Capital turnover is a function of the efficiency of working capital management and of net fixed assets.	Analog Devices Inc.’s TO improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Analog Devices Inc., CTR calculation, comparison to benchmarks

	Nov 2, 2019	Nov 3, 2018	Oct 28, 2017	Oct 29, 2016	Oct 31, 2015
Selected Financial Data (US$ in thousands)
Net operating profit after taxes (NOPAT)¹	1,510,496	927,190	74,740	925,163	622,219
Add: Cash operating taxes²	262,714	939,609	1,005,861	111,817	172,460
Net operating profit before taxes (NOPBT)	1,773,209	1,866,799	1,080,602	1,036,980	794,680
Tax Rate
CTR³	14.82%	50.33%	93.08%	10.78%	21.70%
Benchmarks
CTR, Competitors⁴
Advanced Micro Devices Inc.	12.55%	5.44%	64.46%	—	—
Apple Inc.	16.60%	64.38%	14.50%	17.63%	23.61%
Applied Materials Inc.	16.09%	27.18%	8.67%	14.87%	23.00%
Broadcom Inc.	15.10%	11.38%	16.03%	—	19.97%
Cisco Systems Inc.	24.92%	89.18%	19.15%	16.48%	17.77%
Intel Corp.	10.33%	18.16%	59.84%	16.68%	26.25%
Lam Research Corp.	14.26%	24.00%	1.52%	11.77%	10.13%
Micron Technology Inc.	4.94%	3.36%	6.08%	104.15%	6.26%
NVIDIA Corp.	1.47%	15.99%	2.78%	-0.02%	6.81%
Qualcomm Inc.	16.54%	905.86%	54.42%	20.17%	19.01%
Texas Instruments Inc.	11.38%	18.14%	37.69%	31.13%	30.79%

Based on: 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 Cash operating taxes. See details »

³ 2019 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 262,714 ÷ 1,773,209 = 14.82%

⁴ Click competitor name to see calculations.

Tax rate	Description	The company
CTR	Effective cash tax rate on operating income.	Analog Devices Inc.’s CTR decreased from 2017 to 2018 and from 2018 to 2019.

Analog Devices Inc. (NASDAQ:ADI)

Return on Capital (ROC)

Return on Invested Capital (ROIC)

Decomposition of ROIC

Operating Profit Margin (OPM)

Turnover of Capital (TO)

Effective Cash Tax Rate (CTR)