Analog Devices Inc (ADI)
Profitability ratios
Return on sales
| Nov 2, 2024 | Oct 28, 2023 | Oct 29, 2022 | Oct 30, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 57.01% | 65.35% | 63.76% | 65.28% | 68.22% |
| Operating profit margin | 21.53% | 31.72% | 27.75% | 24.41% | 27.70% |
| Pretax margin | 18.83% | 29.93% | 26.23% | 19.17% | 24.25% |
| Net profit margin | 17.32% | 27.50% | 23.27% | 20.06% | 22.57% |
Analog Devices Inc's profitability ratios have shown a downward trend over the past five years. The gross profit margin decreased from 68.22% in 2020 to 57.01% in 2024, indicating a decline in the company's ability to generate profits from its core operations.
Similarly, the operating profit margin dropped from 27.70% in 2020 to 21.53% in 2024, reflecting a reduction in the efficiency of the company's operating expenses management. The pretax margin also decreased from 24.25% in 2020 to 18.83% in 2024, suggesting a decline in Analog Devices Inc's profitability before taxes.
The net profit margin, representing the company's net income as a percentage of revenue, experienced a decrease from 22.57% in 2020 to 17.32% in 2024, indicating a diminishing bottom-line profitability for the company.
Overall, the declining trend in profitability ratios suggests that Analog Devices Inc may be facing challenges in maintaining its profitability levels and may need to reassess its cost structure and revenue generation strategies to improve its financial performance in the future.
Return on investment
| Nov 2, 2024 | Oct 28, 2023 | Oct 29, 2022 | Oct 30, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.21% | 7.84% | 6.52% | 3.23% | 6.98% |
| Return on assets (ROA) | 3.39% | 6.79% | 5.46% | 2.66% | 5.69% |
| Return on total capital | 4.86% | 9.34% | 7.67% | 3.42% | 8.78% |
| Return on equity (ROE) | 4.65% | 9.32% | 7.54% | 3.66% | 10.17% |
Analog Devices Inc's profitability ratios have shown some fluctuations over the past five years. The Operating return on assets (Operating ROA) decreased from 7.84% in 2023 to 4.21% in 2024, indicating a decline in the company's ability to generate operating income from its assets. The Return on assets (ROA) also followed a similar trend, decreasing from 6.79% in 2023 to 3.39% in 2024, suggesting a decrease in overall profitability relative to its total assets.
In terms of Return on total capital, the company experienced a decrease from 9.34% in 2023 to 4.86% in 2024, indicating a decline in the return generated on the total invested capital. The Return on equity (ROE) also decreased from 9.32% in 2023 to 4.65% in 2024, reflecting a decrease in the return generated for equity shareholders.
Overall, the decline in profitability ratios from 2023 to 2024 suggests potential challenges for Analog Devices Inc in efficiently utilizing its assets and capital to generate profits. As an analyst, it would be important to further investigate the reasons behind these declines and assess the company's strategic initiatives to improve profitability in the future.