Stock Analysis on Net
Stock Analysis on Net

Analog Devices Inc. (NASDAQ:ADI)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin 

Microsoft Excel

Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.

Two-Component Disaggregation of ROE

Analog Devices Inc., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Nov 2, 2024 4.65% = 3.39% × 1.37
Oct 28, 2023 9.32% = 6.79% × 1.37
Oct 29, 2022 7.54% = 5.46% × 1.38
Oct 30, 2021 3.66% = 2.66% × 1.38
Oct 31, 2020 10.17% = 5.69% × 1.79
Nov 2, 2019 11.64% = 6.37% × 1.83

Based on: 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), 10-K (reporting date: 2019-11-02).

The primary reason for the decrease in return on equity ratio (ROE) over 2024 year is the decrease in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Analog Devices Inc., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Nov 2, 2024 4.65% = 17.35% × 0.20 × 1.37
Oct 28, 2023 9.32% = 26.94% × 0.25 × 1.37
Oct 29, 2022 7.54% = 22.88% × 0.24 × 1.38
Oct 30, 2021 3.66% = 19.00% × 0.14 × 1.38
Oct 31, 2020 10.17% = 21.79% × 0.26 × 1.79
Nov 2, 2019 11.64% = 22.75% × 0.28 × 1.83

Based on: 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), 10-K (reporting date: 2019-11-02).

The primary reason for the decrease in return on equity ratio (ROE) over 2024 year is the decrease in profitability measured by net profit margin ratio.

Five-Component Disaggregation of ROE

Analog Devices Inc., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Nov 2, 2024 4.65% = 0.92 × 0.85 × 22.27% × 0.20 × 1.37
Oct 28, 2023 9.32% = 0.92 × 0.93 × 31.47% × 0.25 × 1.37
Oct 29, 2022 7.54% = 0.89 × 0.94 × 27.46% × 0.24 × 1.38
Oct 30, 2021 3.66% = 1.05 × 0.88 × 20.68% × 0.14 × 1.38
Oct 31, 2020 10.17% = 0.93 × 0.87 × 26.86% × 0.26 × 1.79
Nov 2, 2019 11.64% = 0.92 × 0.87 × 28.62% × 0.28 × 1.83

Based on: 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), 10-K (reporting date: 2019-11-02).

The primary reason for the decrease in return on equity ratio (ROE) over 2024 year is the decrease in operating profitability measured by EBIT margin ratio.

Two-Component Disaggregation of ROA

Analog Devices Inc., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Nov 2, 2024 3.39% = 17.35% × 0.20
Oct 28, 2023 6.79% = 26.94% × 0.25
Oct 29, 2022 5.46% = 22.88% × 0.24
Oct 30, 2021 2.66% = 19.00% × 0.14
Oct 31, 2020 5.69% = 21.79% × 0.26
Nov 2, 2019 6.37% = 22.75% × 0.28

Based on: 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), 10-K (reporting date: 2019-11-02).

The primary reason for the decrease in return on assets ratio (ROA) over 2024 year is the decrease in profitability measured by net profit margin ratio.

Four-Component Disaggregation of ROA

Analog Devices Inc., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Nov 2, 2024 3.39% = 0.92 × 0.85 × 22.27% × 0.20
Oct 28, 2023 6.79% = 0.92 × 0.93 × 31.47% × 0.25
Oct 29, 2022 5.46% = 0.89 × 0.94 × 27.46% × 0.24
Oct 30, 2021 2.66% = 1.05 × 0.88 × 20.68% × 0.14
Oct 31, 2020 5.69% = 0.93 × 0.87 × 26.86% × 0.26
Nov 2, 2019 6.37% = 0.92 × 0.87 × 28.62% × 0.28

Based on: 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), 10-K (reporting date: 2019-11-02).

The primary reason for the decrease in return on assets ratio (ROA) over 2024 year is the decrease in operating profitability measured by EBIT margin ratio.

Disaggregation of Net Profit Margin

Analog Devices Inc., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Nov 2, 2024 17.35% = 0.92 × 0.85 × 22.27%
Oct 28, 2023 26.94% = 0.92 × 0.93 × 31.47%
Oct 29, 2022 22.88% = 0.89 × 0.94 × 27.46%
Oct 30, 2021 19.00% = 1.05 × 0.88 × 20.68%
Oct 31, 2020 21.79% = 0.93 × 0.87 × 26.86%
Nov 2, 2019 22.75% = 0.92 × 0.87 × 28.62%

Based on: 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), 10-K (reporting date: 2019-11-02).

The primary reason for the decrease in net profit margin ratio over 2024 year is the decrease in operating profitability measured by EBIT margin ratio.