Analog Devices Inc. (NASDAQ:ADI)

Debt to Equity and Related Ratios

Over the observed periods, the company’s debt to equity ratio exhibited a significant decline from 0.43 in 2020 to 0.18 in 2021, maintaining this lower level through 2022. From 2023 onwards, it showed a gradual increase, reaching 0.25 by 2025. When including operating lease liabilities, a similar pattern is evident, with the ratio decreasing sharply initially and then slowly rising in later years, ending at 0.26 in 2025.

Debt to Capital and Related Ratios

The debt to capital ratio also followed a comparable trend, falling from 0.30 in 2020 to 0.15 in 2021 and 2022, then marginally increasing to 0.20 by 2025. Including operating lease liabilities, this ratio started slightly higher but followed the same trajectory, ending at 0.21 in 2025. This indicates a reduction in reliance on debt financing relative to the company’s capital base initially, followed by a moderate increase in leverage in subsequent years.

Debt to Assets and Related Ratios

The debt to assets ratio decreased from 0.24 in 2020 to 0.13 by 2021 and 2022, before a steady rise to 0.18 in 2025. Incorporating operating lease liabilities did not materially alter this trend, with the ratio going from 0.25 to 0.19 over the same period. These ratios reflect a declining proportion of debt relative to total assets initially, followed by a gradual increase, consistent with the other leverage measures.

Financial Leverage

The financial leverage ratio mirrored the debt trends, starting at 1.79 in 2020 and dropping to around 1.38 from 2021 to 2023. It remained relatively stable through 2024 and showed a slight uptick to 1.42 in 2025. This pattern indicates initial deleveraging, followed by modest re-leveraging more recently.

Interest Coverage

Interest coverage experienced a marked improvement, rising from 7.79 in 2020 to a peak of 16.46 in 2022, indicating enhanced ability to cover interest expenses through operating earnings. However, it declined notably afterwards to 6.52 in 2024 before partially recovering to 9.54 in 2025. This suggests some volatility in earnings relative to interest obligations in recent years.

Fixed Charge Coverage

Fixed charge coverage also improved significantly from 6.48 in 2020 to a high of 12.87 in 2022, indicative of strong capacity to meet fixed financial charges during that period. Similar to interest coverage, it decreased to 5.55 in 2024 before increasing again to 8.04 in 2025. The pattern aligns with fluctuating operational performance and financial obligations over the timeframe.

Total Debt

The total debt has exhibited an overall increasing trend from 2020 to 2025. Starting at approximately $5.15 billion in 2020, it escalated to around $8.59 billion by 2025. Notable increments were observed between 2020 and 2021, with a rise of approximately 31.6%, followed by a moderate fluctuation in the subsequent years but maintaining an upward trajectory overall.

Shareholders’ Equity

Shareholders’ equity experienced a significant surge from 2020 to 2021, increasing from about $12.0 billion to nearly $38.0 billion. However, after this sharp increase, equity showed a gradual declining trend over the subsequent years, falling to approximately $33.8 billion by 2025. This marks a reduction of roughly 11% from the peak in 2021, indicating possible share buybacks, dividend payouts, or changes in retained earnings.

Debt to Equity Ratio

The debt to equity ratio decreased substantially from 0.43 in 2020 to 0.18 in 2021, reflecting the significant equity growth that outpaced the increase in debt. Post-2021, the ratio demonstrated a gradual upward trend, increasing from 0.18 to 0.25 by 2025. This suggests that while debt levels have continued to rise steadily, shareholders’ equity growth has slowed, impacting the leverage ratio. Overall, the company’s leverage remains moderate, with the ratio well below 1 throughout the period.

Summary

The analyzed data indicates an overall increasing debt load balanced by a large increase and subsequent gradual decline in shareholders’ equity. The leverage, measured as debt to equity ratio, improved dramatically in 2021 before showing a moderate rise, suggesting increased borrowing or slowing equity growth. These dynamics imply active capital structure management, potentially balancing growth investments through debt while sustaining a strong equity base earlier in the period.

The financial data reveals notable trends in the capital structure and leverage of the company over the analyzed periods.

Total Debt (including operating lease liability)

The total debt has generally increased over the periods observed, starting at approximately $5.47 billion and rising to nearly $8.95 billion by the end of the timeline. There was a significant increase from 2020 to 2021, followed by a slight dip in 2022, and then a consistent upward trend through 2025.

Shareholders’ Equity

Shareholders’ equity exhibited substantial growth from 2020 to 2021, increasing from about $12.0 billion to nearly $38.0 billion. After that peak, equity shows a gradual decline year over year, reaching approximately $33.8 billion in the last reported period in 2025. This suggests some distribution or reduction in equity base after the initial surge.

Debt to Equity Ratio (including operating lease liability)

The debt-to-equity ratio decreased significantly from 0.46 in 2020 to 0.19 in 2021 and remained stable at 0.19 in 2022. Afterward, it gradually increased to 0.26 by 2025. The initial decline points towards a strengthening equity base relative to debt, improving leverage position in 2021 and 2022, while the modest rise in subsequent years suggests a cautious re-leveraging.

In summary, the company's total debt has increased over time, while equity surged markedly and then declined moderately. The debt-to-equity ratio reflects this dynamic with a notable drop followed by a slow increase. This pattern may indicate an initial phase of capital strengthening and deleveraging, followed by a period of incremental debt accumulation relative to equity.

Total Debt

The total debt exhibits a consistent upward trend over the observed periods. Starting at approximately 5.15 billion US dollars in 2020, it increased steadily, reaching over 8.59 billion US dollars by 2025. There was a slight decrease from 6.77 billion in 2021 to 6.55 billion in 2022, but the overall trajectory remains upward through to 2025.

Total Capital

Total capital experienced a substantial increase from 17.14 billion US dollars in 2020 to nearly 44.76 billion in 2021. However, following this peak, total capital showed a declining pattern, decreasing gradually each year from 2021 to 2025 and stabilizing around 42.4 billion US dollars in the final period. This indicates a significant surge in capital early in the timeframe, followed by a period of consolidation or decrease.

Debt to Capital Ratio

Despite the absolute increase in total debt, the debt to capital ratio decreased sharply from 0.30 in 2020 to approximately 0.15 in 2021 and remained relatively stable in 2022 and 2023. From 2023 onward, this ratio has been increasing incrementally from 0.16 to 0.20 by 2025. This pattern suggests that while borrowing levels have risen, capital levels have generally outpaced debt growth initially, but debt is gaining a relatively greater proportion in the capital structure towards the end of the period.

Total Debt (including operating lease liability)

The total debt exhibited a consistent upward trend over the periods analyzed. Starting at approximately 5.47 billion USD, the total debt increased significantly to nearly 8.95 billion USD by the last reported period. This represents an overall growth of roughly 63.5% in total debt across the six-year span, with relatively steady increments year over year.

Total Capital (including operating lease liability)

Total capital experienced a marked increase from the initial period to the second period, nearly tripling from approximately 17.47 billion USD to 45.11 billion USD. Following this significant increase, total capital showed a slight declining trend with values fluctuating between approximately 42.76 billion USD and 43.44 billion USD in the subsequent years, indicating stabilization after the initial surge.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio started relatively high at 0.31 but sharply declined to 0.16 in the second period. This lower level of leverage was then maintained with minor incremental increases over the next four periods, rising gradually from 0.16 to 0.21 by the final reporting date. The ratio’s trend indicates improved capitalization and a reduction in relative debt burden initially, followed by a moderate increase in leverage in the later periods.

Summary

Overall, the analyzed data show a substantial increase in total debt alongside a pronounced initial expansion in total capital, which then leveled off. The debt to capital ratio reflects these dynamics, with an initial decrease suggesting stronger capitalization, followed by a gradual rise, implying slightly increased leverage in recent periods. This pattern suggests a strategic approach to managing capital structure, balancing growth with controlled leverage.

Total Debt

The total debt of the company has exhibited an overall upward trend over the observed periods. Starting at approximately 5.15 billion USD in 2020, the debt increased significantly to about 6.77 billion USD in 2021. Although there was a slight decline in 2022 to around 6.55 billion USD, the debt resumed its upward trajectory in the subsequent years, reaching approximately 8.59 billion USD by 2025. This indicates a consistent increase in leverage, particularly notable in the last two years.

Total Assets

Total assets showed a substantial increase from around 21.47 billion USD in 2020 to over 52.32 billion USD in 2021, marking a notable expansion in asset base. However, from 2021 onwards, total assets have experienced a gradual decline each year, decreasing to approximately 48.0 billion USD by 2025. This decreasing trend following the peak in 2021 suggests asset base reduction or depreciation over time.

Debt to Assets Ratio

The debt to assets ratio decreased sharply from 0.24 in 2020 to 0.13 in both 2021 and 2022, reflecting a reduction in leverage relative to the asset base. From 2023 onwards, the ratio began to rise gradually, moving from 0.14 to 0.18 by 2025. This indicates a shift towards increased financial leverage after 2022, although it remains below the 2020 level.

Summary

Overall, the company’s financial structure shows an initial phase of significant asset growth coupled with moderate leverage reduction until 2022. Following this period, there is evidence of a contraction in total assets and a simultaneous increase in total debt and debt to asset ratio. This pattern suggests a strategic shift towards higher leverage amid declining asset levels, which may require careful monitoring for risk management in the coming periods.

Total debt (including operating lease liability)

The total debt exhibits a consistent upward trajectory from approximately $5.47 billion in 2020 to around $8.95 billion in 2025, indicating a significant increase in liabilities over the six-year period.

Total assets

Total assets peaked in 2021 at roughly $52.32 billion but subsequently declined in the following years, reaching approximately $47.99 billion in 2025. This represents a downward trend in assets after an initial substantial increase from 2020 to 2021.

Debt to assets ratio (including operating lease liability)

The debt to assets ratio decreased sharply from 0.25 in 2020 to 0.14 in 2021 and remained stable at this level through 2022. From 2023 onward, this ratio began to climb gradually, reaching 0.19 by 2025. This suggests the company initially improved its leverage position significantly but then saw a steady increase in leverage in the subsequent years as debt rose and assets decreased.

Total assets

The total assets exhibited a significant increase between 2020 and 2021, more than doubling from approximately 21.5 billion to 52.3 billion US dollars. However, from 2021 onwards, a gradual decline is observed, with total assets decreasing steadily each year, reaching about 48.0 billion US dollars by 2025. This trend indicates a contraction or divestiture phase after a substantial asset growth period.

Shareholders’ equity

Shareholders’ equity followed a similar pattern of rapid growth between 2020 and 2021, increasing from nearly 12.0 billion to approximately 38.0 billion US dollars. Thereafter, equity steadily declined year-over-year, falling to about 33.8 billion US dollars by 2025. This decline suggests that the company may have experienced losses, dividend payments exceeding earnings, share buybacks, or other equity-reducing events after the peak in 2021.

Financial leverage

The financial leverage ratio decreased from 1.79 in 2020 to roughly 1.38 in 2021 and remained relatively stable through 2024, indicating a reduction in reliance on debt relative to equity during this period. A slight increase to 1.42 in 2025 indicates a modest rise in the use of debt financing compared to equity. Overall, the leverage trend suggests a strategic deleveraging followed by a cautious increase in leverage in the most recent year.

Earnings before interest and tax (EBIT)

The earnings before interest and tax (EBIT) show a generally increasing trend with some fluctuations. Starting at approximately 1.5 billion US dollars in 2020 and 2021, EBIT experienced a significant rise in 2022 and 2023, reaching over 3.2 billion dollars. However, in 2024, there was a notable decrease to about 2.1 billion dollars, followed by a recovery in 2025 to nearly 3 billion dollars.

Interest expense

Interest expense has shown an overall upward trend throughout the period. Beginning at approximately 193 million US dollars in 2020, the expense remained relatively stable in 2021, then gradually increased year over year, reaching over 317 million dollars by 2025. The most marked increases occurred between 2022 and 2024.

Interest coverage

The interest coverage ratio, which measures the company’s ability to meet interest obligations from EBIT, varied significantly over the years. After starting at 7.79 in 2020, it improved to a peak above 16 in 2022, indicating strong coverage. Subsequently, the ratio declined to 6.52 in 2024, reflecting increased pressure from rising interest expenses relative to EBIT, but then improved again to 9.54 in 2025.

Overall analysis

The data indicates that despite fluctuations in EBIT, the company’s earnings capacity substantially increased in the middle years before falling back and partially recovering. Interest expenses steadily rose, exerting increasing pressure on profitability and coverage metrics. The interest coverage ratio's peak in 2022 suggests a period of strong earnings relative to debt costs, while the decline in 2024 highlights a period of higher financial risk. Recovery in 2025 indicates some alleviation of this risk, but the ratio remains below earlier peak levels, suggesting ongoing attention to debt servicing capacity is warranted.

Earnings Before Fixed Charges and Tax

The earnings before fixed charges and tax exhibited an overall increasing trend across the six-year period, rising from approximately 1.55 billion USD in 2020 to a peak of nearly 3.94 billion USD in 2023. There was a notable surge between 2021 and 2022, where earnings more than doubled. A decline occurred in 2024, dropping to around 2.17 billion USD, followed by a recovery in 2025 to about 3.10 billion USD. This pattern suggests significant volatility with strong growth phases and intermittent decreases.

Fixed Charges

Fixed charges steadily increased from 239.2 million USD in 2020 to a high of approximately 390.6 million USD in 2024. Following this peak, there was a slight decline in 2025 to 385.1 million USD. The consistent rise until 2024 indicates growing obligations related to interest and other fixed expenses over the period, with a minor easing in the latest year observed.

Fixed Charge Coverage Ratio

The fixed charge coverage ratio showed considerable fluctuation throughout the period. Starting at 6.48 in 2020, it reached an all-time high of 12.87 in 2022, indicating strong ability to cover fixed charges at that time. However, the ratio declined sharply to 5.55 in 2024, the lowest level in the series, reflecting a reduced margin of safety in meeting fixed obligations relative to earnings. It then improved to 8.04 in 2025, suggesting a partial recovery in coverage capacity.

Overall Analysis

The financial data indicates that the company experienced significant earnings growth, particularly between 2021 and 2023, which improved its capacity to cover fixed charges. Despite rising fixed charges year-over-year, the coverage ratio remained generally healthy, though it dipped noticeably in 2024, hinting at possible challenges during that period. The partial rebound in coverage in 2025 reflects recovery efforts. These trends highlight a dynamic financial environment with periods of strong operational performance and manageable fixed obligations, alongside moments of increased financial risk.