Analog Devices Inc. (NASDAQ:ADI)

The analysis of the financial ratios over the period from late 2020 to late 2025 reveals several notable trends in asset management and efficiency metrics.

Net Fixed Asset Turnover

This ratio displays significant fluctuations throughout the years. Beginning at a high level of 5 in 2020, it declines sharply to 3.7 in 2021, recovers back to 5 in 2022, then undergoes a gradual decrease to 2.76 by 2024, followed by a slight recovery to 3.32 in 2025. This pattern suggests variability in the company's ability to generate revenue from its fixed assets, potentially influenced by asset base changes or operational efficiency shifts.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

This adjusted ratio mirrors the overall trend of the standard net fixed asset turnover, starting at 4.07 in 2020, decreasing to 3.24 in 2021, rising again to 4.51 in 2022, and then tapering off to a low of 2.58 in 2024 before a modest recovery to 3.11 in 2025. The inclusion of right-of-use assets and operating leases consistently results in a lower turnover compared to the standard net fixed asset turnover, indicating the impact of leased assets on asset utilization.

Total Asset Turnover

The total asset turnover ratio remains relatively low and exhibits a decreasing trend from 0.26 in 2020 to 0.14 in 2021. It then improves to 0.24 in 2022 and stabilizes around 0.25 in 2023, followed by a dip to 0.20 in 2024 and a slight improvement to 0.23 in 2025. Overall, the ratio suggests moderate efficiency in using total assets to generate sales, with a notable dip in 2021 indicating potential challenges during that period.

Equity Turnover

The equity turnover ratio shows a sharp decrease from 0.47 in 2020 to 0.19 in 2021, indicating a reduced ability to generate revenue from shareholders’ equity. Subsequently, it improves to 0.33 in 2022 and 0.35 in 2023, before decreasing again to 0.27 in 2024 and recovering to 0.33 in 2025. This pattern suggests variable efficiency in equity utilization over the examined years, with a significant performance drop noted in 2021.

Collectively, these ratios indicate that the company's asset and equity turnover ratios experienced volatility over the period, with notable declines in 2021 across multiple metrics followed by partial recoveries. The inclusion of operating lease assets consistently lowers fixed asset turnover ratios, reflecting the accounting treatment of leased assets. While there is evidence of recovery in later years, the overall asset utilization efficiency remains below the initial 2020 levels.

The financial data reveals distinct trends in revenue, net property, plant and equipment, and net fixed asset turnover over the analyzed periods.

Revenue

The revenue exhibited substantial growth from 2020 to 2022, increasing from approximately $5.6 billion to $12 billion. However, there was a decline in 2024 to about $9.4 billion, followed by a partial recovery in 2025 nearing $11 billion. This pattern suggests volatility in revenue generation, with a peak reached in 2022 and some fluctuations thereafter.

Net Property, Plant and Equipment (PP&E)

The net value of property, plant, and equipment showed a steady upward trend throughout the periods, rising from about $1.12 billion in 2020 to over $3.3 billion in 2025. This indicates ongoing capital investment and expansion in tangible assets, supporting potential growth and production capacity enhancement.

Net Fixed Asset Turnover

The efficiency ratio, which measures revenue generated per dollar of net fixed assets, demonstrated variability. Starting at 5 in 2020, it decreased to 3.7 in 2021, rebounded to 5 in 2022, then declined again to 2.76 in 2024 before slightly improving to 3.32 in 2025. The fluctuations suggest changes in asset utilization efficiency, potentially influenced by shifts in revenue volume relative to fixed asset base expansion.

In summary, while the company invested continuously in fixed assets, revenue growth was marked by significant fluctuations, impacting asset turnover ratios. The declining trend in net fixed asset turnover after 2022 points to a period where asset growth outpaced revenue increases, indicating potential underutilization or delayed returns on recent capital investments.

The financial data reveals several notable trends over the reported periods, focusing on revenue, net property, plant and equipment (including operating lease, right-of-use asset), and net fixed asset turnover.

Revenue

Revenue exhibited a general upward trend from 2020 to 2023, increasing from approximately 5.6 billion US dollars to over 12.3 billion US dollars. However, in 2024, there was a significant decline to approximately 9.4 billion US dollars, followed by a partial recovery in 2025, with revenue rising to over 11 billion US dollars. This pattern indicates a strong growth phase followed by a notable contraction and subsequent rebound.

Net Property, Plant and Equipment (Including Operating Lease, Right-of-Use Asset)

This asset category showed consistent growth throughout the years, increasing steadily from about 1.4 billion US dollars in 2020 to approximately 3.6 billion US dollars in 2024, before a slight decrease to 3.55 billion US dollars in 2025. The continuous increase until 2024 suggests consistent investment in fixed assets and leasing arrangements, supporting operational capacity expansion. The marginal decrease in 2025 could indicate asset disposals, depreciation outpacing additions, or a strategic shift in asset management.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

The net fixed asset turnover ratio fluctuated over the years, starting at 4.07 in 2020. It declined to 3.24 in 2021, then increased sharply to 4.51 in 2022, followed by a decrease to 3.52 in 2023. The ratio further declined to 2.58 in 2024 but showed some recovery to 3.11 in 2025. These fluctuations suggest varying efficiency in utilizing fixed assets to generate revenue. The initial decline and later peak could relate to shifts in asset base and revenue growth rates, with the lower ratios in 2024 and 2025 aligning with the revenue decline and partial recovery observed in those years.

Overall, the data indicates a period of rapid revenue growth supported by increasing investments in property and equipment, followed by a contraction and partial recovery phase. The efficiency in asset utilization, as represented by the fixed asset turnover ratio, shows variability in response to these changes, highlighting potential operational adjustments or market conditions influencing asset productivity.

Revenue

The revenue shows a significant increase from 5,603,056 thousand US dollars in 2020 to a peak of 12,013,953 thousand US dollars in 2022, more than doubling over two years. After reaching this high point, revenue slightly increased to 12,305,539 thousand in 2023, followed by a notable decline to 9,427,157 thousand in 2024. The subsequent year records a recovery with revenue rising again to 11,019,707 thousand US dollars in 2025, though it remains below the peak levels observed in 2022 and 2023.

Total Assets

Total assets exhibit a steep increase from 21,468,603 thousand US dollars in 2020 to 52,322,071 thousand in 2021. After 2021, total assets gradually decline, reaching 48,792,478 thousand in 2023 and continuing a slight downward trend to 47,992,712 thousand US dollars by 2025. This overall pattern suggests a rapid expansion of asset base initially, followed by a moderate reduction and stabilization over the subsequent years.

Total Asset Turnover

The total asset turnover ratio decreases sharply from 0.26 in 2020 to 0.14 in 2021. It then rebounds to 0.24 in 2022 and remains relatively stable around 0.25 in 2023. The ratio decreases again to 0.20 in 2024 but improves slightly to 0.23 in 2025. This variation indicates fluctuating efficiency in using assets to generate revenue, with the lowest efficiency observed in 2021 and a general recovery afterward, although not reaching the initial 2020 efficiency level.

Summary

The data presents a scenario where revenue growth has been marked by strong increases leading up to 2022 and 2023, followed by a decline and partial recovery. Total assets expanded rapidly in the early period, then declined slightly and stabilized. The asset turnover ratio reflects volatility in operational efficiency, corresponding with the fluctuations in both revenue and asset levels. Overall, the company experienced rapid growth and expansion, followed by a period of adjustment and stabilization across its financial metrics.

The financial data reveals several notable trends over the observed periods. Revenue demonstrates a fluctuating pattern with an overall upward trend in the earlier years, peaking significantly in the year ending October 29, 2022, followed by a decline in the subsequent year and a partial recovery by November 1, 2025. This suggests variability in sales performance, with a strong surge at one point and some volatility afterward.

Shareholders’ equity shows considerable variation, with a sharp increase observed from October 31, 2020 to October 30, 2021, followed by a gradual decline through to November 1, 2025. This indicates a peak in equity levels in 2021, after which equity has been decreasing steadily but remains at a higher level than at the start of the period. The decline in equity could imply distributions, losses, or other uses of equity capital over recent years.

The equity turnover ratio, which measures revenue generated per unit of shareholders’ equity, exhibits a declining trend initially from 0.47 in 2020 to 0.19 in 2021, then partially recovers with fluctuations through to 2025. This pattern indicates lower efficiency in generating revenue from equity during 2021, with some improvement in subsequent years but without returning to the initial high level. The variation in equity turnover aligns with the inverse trends observed in revenue and shareholders’ equity during this timeframe.

Revenue

Overall growth followed by volatility, peaking in 2022 and then partially declining and recovering.

Shareholders’ equity

Significant increase early in the period with gradual reduction afterward, suggesting changes in capital structure or retained earnings.

Equity turnover ratio

Initial decline indicating reduced efficiency in using equity for revenue generation, with moderate recovery but no return to peak efficiency levels.