Analog Devices Inc. (NASDAQ:ADI)

Return on Assets (ROA)

The return on assets demonstrates variability over the examined periods. Initial quarterly values show an upward trajectory, rising from 6.56% to a peak of 7.86% within the first three quarters. However, a notable decline occurs in the subsequent quarters, dropping to lows around 2.5% to 3.75%. Following this downturn, the ROA recovers steadily, reaching levels near 7.6% by mid-2023. After this peak, a gradual decrease is observed again through early 2024, tapering down to approximately 3.26% by late 2024. Towards the final quarters, the ROA exhibits a moderate improvement, ending at 4.72%. This pattern indicates cyclical performance with periods of recovery after significant decreases.

Financial Leverage

The financial leverage ratio remains relatively stable throughout the periods, with minor fluctuations around 1.37 to 1.77. The highest leverage ratio is observed early, near 1.77, but it decreases and stabilizes around 1.36 to 1.39 in the middle quarters. Toward the last few periods, a slight increase occurs, culminating at approximately 1.42. Overall, leverage shows consistency with limited volatility, suggesting a stable capital structure over time.

Return on Equity (ROE)

The return on equity mirrors the trend seen in ROA, with early quarters registering higher values and later periods experiencing a sharp decline. Initially, the ROE advances from 11.63% to a peak of 13.87%. This figure then decreases drastically to values as low as 3.43%. Post-decline, there is a gradual recovery with ROE increasing steadily to around 10.45% by mid-2023. After reaching this point, the ratio declines again in the subsequent quarters but begins to trend upward towards the end of the data, finishing at 6.7%. These fluctuations highlight periods of both strong and weak profitability relative to equity, reflecting varying operational efficiency or earnings volatility.

The financial performance over the reviewed periods displays several notable trends. The net profit margin experienced considerable fluctuation, with an initial rise reaching a peak around mid-2023, followed by a gradual decline with some minor rebounds towards the end of the timeline. This suggests variability in profitability, potentially influenced by changing operational efficiencies or market conditions.

Asset turnover shows a distinct pattern of growth in the earlier quarters, reaching its highest point around the third quarter of 2023, indicating an increased efficiency in using assets to generate sales. However, after this peak, there is a slight downward adjustment, stabilizing at a moderate level, which might imply either asset base growth outpacing revenue or a strategic shift affecting asset utilization.

Financial leverage remains relatively stable throughout the entire period, maintaining a ratio close to 1.37 to 1.42. This steadiness in leverage suggests a consistent approach to financing and capital structure with no significant changes in debt levels relative to equity, indicating stable risk exposure from a capital perspective.

Return on Equity (ROE) shows a more volatile trend, decreasing sharply in early 2022 and then gradually increasing again over subsequent periods. The initial drop aligns temporally with the dip in net profit margin, signaling reduced profitability impact on shareholder returns. The slow recovery of ROE towards later periods indicates improvements in either operational profits or capital efficiency, although it remains below the earlier peak levels.

Net Profit Margin

Demonstrates variability with an early upward trend, peaking around mid-2023, followed by a decline and minor recoveries.

Asset Turnover

Increases steadily through early periods, peaking in mid-2023, then slightly declines and stabilizes, reflecting changing asset utilization efficiency.

Financial Leverage

Remains consistent with minor fluctuations, indicating a stable capital structure and risk profile.

Return on Equity (ROE)

Decreases significantly in early 2022, then slowly recovers, reflecting fluctuating profitability and capital efficiency impacts on shareholder returns.

The company's financial performance exhibits notable fluctuations across the presented periods, with distinct trends emerging in profitability, efficiency, and leverage metrics.

Tax Burden

The tax burden ratio remains relatively stable over time, primarily fluctuating between 0.84 and 1.05. There is a slight declining trend from values around 0.92 in early periods toward 0.84 in the most recent periods, suggesting a marginal reduction in the proportion of income paid as taxes.

Interest Burden

The interest burden ratio shows minor variation, generally remaining high between 0.85 and 0.95. After dipping to around 0.85 in mid to later periods, it trends slightly upward toward 0.9 by the end, indicating that interest expenses have had a modest but stable impact on pre-tax income throughout the timeframe.

EBIT Margin

The EBIT margin demonstrates significant volatility. Initially rising from approximately 29% to a peak near 32%, it incurs a sharp decline around the fourth quarter of 2021 to a low near 16-18%. Subsequently, there is a recovery with values improving back toward the high twenties by late 2023, followed by a gradual decrease below 23% into 2024, and a modest rebound back up to around 27% in the final period. This pattern indicates variable operating profitability, potentially driven by cyclical factors or operational challenges during 2021-2022, with partial recovery thereafter.

Asset Turnover

Asset turnover experiences a marked decrease during 2021, dropping from around 0.3 to about 0.14, indicating a sharp decline in efficiency in using assets to generate revenue. After this trough, the ratio recovers steadily through 2023, stabilizing around 0.24-0.26, though it shows a minor decline and consolidation near 0.19-0.23 in the subsequent periods. This reflects a stabilization at a moderately lower efficiency level compared to early 2021 figures.

Financial Leverage

The financial leverage ratio begins near 1.77 and declines sharply in late 2021 to approximately 1.37, maintaining a stable range around 1.35 to 1.42 thereafter. This reduction suggests a strategic deleveraging or rebalancing of capital structure, with leverage held relatively steady in recent periods.

Return on Equity (ROE)

ROE exhibits significant fluctuation over the period. After increasing initially from 11.63% to nearly 14% in mid-2021, it collapses precipitously to around 3.4% in late 2021. Gradual improvement follows, climbing back toward 10% by late 2023 before declining again to lower single-digit levels in 2024. The latest periods show a recovering trend rising to 6.7%. Such variations reflect the combined effects of volatility in profitability, asset efficiency, and leverage, with ROE mirroring the ebb and flow of operational effectiveness and financial strategy.

Overall, the analyzed data reflects a period of considerable operational and financial variability, punctuated by a significant performance trough in late 2021 and subsequent partial recovery. Efficiency metrics suggest a hit to asset utilization during this time, while the company appeared to reduce leverage and manage interest and tax impacts steadily. Profitability as measured by EBIT margin and ROE demonstrates cyclical sensitivity, with recent trends indicating cautious improvement but remaining below early 2021 peaks.

Net Profit Margin

The net profit margin exhibited a fluctuating trend over the observed quarters. Initially, the margin increased from 23.99% to a peak of 26.15% by mid-2021, followed by a sharp decline to 15.18% by early 2022. Subsequently, the margin showed a recovery phase, reaching 29.23% in mid-2023. After this peak, the margin gradually decreased again, falling to a low of 17.07% by mid-2024. In the final recorded quarters, there was a modest improvement, ending at 20.58% by late 2025. This pattern suggests periods of strong profitability interspersed with downturns, reflecting variability in operating efficiency or cost control.

Asset Turnover

Asset turnover started at a low base of 0.27 and remained relatively stable during the initial periods, with a slight decline in late 2021 to 0.14. From early 2022 onward, the ratio steadily improved, peaking at 0.26 in early 2023. Following this, asset turnover trended downwards gradually, reaching 0.20 by mid-2024, before experiencing a gentle recovery to 0.23 by the end of the period. This indicates fluctuating efficiency in utilizing assets to generate revenue, with mid-cycle enhancements around early 2023 and some degradation afterward but a tendency towards gradual stabilization.

Return on Assets (ROA)

The return on assets closely mirrored the net profit margin trend but at lower levels, starting at 6.56% and rising to 7.86% by mid-2021. It then declined sharply to around 2.5% in early 2022, followed by a steady improvement to 7.60% by mid-2023. ROA subsequently declined again to below 3.5% in mid-2024, with slight recovery towards the final quarter reaching 4.72%. This trend reflects the combined effect of profitability and asset utilization trends, indicating varying effectiveness in generating income from asset investments over time.

The analysis of the quarterly financial metrics reveals several notable trends and fluctuations over the observed periods.

Tax Burden

The tax burden ratio fluctuates modestly but generally remains close to 0.90, indicating a stable effective tax rate with slight dips toward the end of the period. Early in the timeline, ratios are around 0.92, with occasional decreases to around 0.84 in the latter quarters, suggesting some variability in tax expenses relative to pre-tax earnings.

Interest Burden

The interest burden ratio exhibits a relatively stable pattern, hovering mainly between 0.85 and 0.95. There is a minor improvement from 0.89 in early periods to a peak near 0.95 during mid-to-late 2023, before slightly declining again. This indicates a generally steady interest expense impact on earnings before taxes across the quarters.

EBIT Margin

The EBIT margin shows substantial variation over the periods. Initially, it is strong, reaching peaks above 31%, then declines sharply to lows around 16.7% in early 2022. A recovery phase follows, with margins improving back to above 33% in early 2023. However, the margin experiences gradual decreases afterward, settling near the low 20% range in later periods before rising mildly again towards the end. This fluctuation suggests variability in operational profitability and potential influences from cost management or revenue changes.

Asset Turnover

Asset turnover starts relatively low, around 0.27-0.30, but experiences a significant drop to approximately 0.14 during late 2021. Subsequently, it improves steadily, reaching around 0.26 in early 2023, followed by a mild declining trend stabilizing around 0.20-0.25 in later periods. These movements indicate variations in how efficiently assets are generating revenue, with a notable dip and partial recovery before stabilization.

Return on Assets (ROA)

ROA follows a pattern closely aligned with EBIT margin and asset turnover trends. It begins at approximately 6.56% and peaks at nearly 7.86%, then drops sharply to around 2.5% in late 2021 and early 2022. Afterward, it recovers to above 7% in early 2023 before undergoing a downward trajectory again, stabilizing around 3-4% toward the end of the timeframe. This indicates that the company’s overall effectiveness in generating profit from its assets has experienced significant variability.

In summary, the financial performance shows periods of volatility, particularly around late 2021 and early 2022, where EBIT margin, asset turnover, and ROA all decline markedly. Following these troughs, there are signs of recovery through early 2023, though protein margins and returns tend to moderate afterward. Interest and tax burdens remain comparatively stable throughout, suggesting consistent financing and tax structures. The interplay between profitability and asset utilization efficiency drives the observed changes in return on assets.

Tax Burden

The tax burden ratio demonstrates moderate volatility over the periods analyzed. Initially, it remains steady around 0.89 to 0.92, with occasional deviations exceeding 1.0 during 2021 Q4 and 2022 Q1, indicating periods of negative or deferred tax effects. In more recent quarters, the ratio trends downward, reaching values as low as 0.84 by late 2024 and 2025, suggesting a reduction in tax-related expenses relative to pre-tax income.

Interest Burden

The interest burden ratio displays a generally stable pattern with slight fluctuations between 0.85 and 0.95. Early periods indicate consistent ratios near 0.89 to 0.91, with a peak around 0.95 in 2022 and early 2023, implying relatively low interest expense impact on earnings before tax. A gradual decline in this ratio is observed beginning in mid-2023, bottoming near 0.84 in late 2024, before recovering slightly toward 0.9 by late 2025. This suggests some variability in interest expense relative to operating profit, but overall the burden remains moderate.

EBIT Margin

The EBIT margin exhibits significant variation throughout the reported quarters. It commences with high margins above 29%, peaking near 32% in mid-2021, followed by a sharp decline to approximately 16.7% in early 2022. Subsequent quarters reflect a partial recovery with margins fluctuating between 18% and 33%, reaching another high point in early 2023. A downward trend emerges in late 2023 through 2024, dipping into the low 20% range. However, the margin begins to improve again toward the end of the dataset, reaching nearly 27.5% by late 2025. This pattern indicates cyclical pressures and income volatility impacting operating profitability.

Net Profit Margin

The net profit margin closely mirrors the trends seen in the EBIT margin but with smaller absolute values. It starts near 24%, rises to over 26% mid-2021, then declines sharply to around 15% in early 2022. A recovery phase follows, with margins achieving roughly 29% in early 2023. From late 2023 onward, a notable decline occurs, bottoming near 16-17% through 2024, before modestly increasing toward approximately 20.6% by late 2025. The fluctuations suggest that net profitability is sensitive to operational performance changes as well as tax and interest burdens.